The pace of new home construction slowed down in July due in large part to an 8.2 per cent decline in multi-unit urban starts — apartments and condos, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC).
The national housing agency said the seasonally adjusted annual rate (SAAR) of home construction was 193,032 units in July, down from 202,338 units in June and below the forecast 195,000 pace for the month.
While multi-unit urban starts decreased by 8.2 per cent to 119,478 units month-over-month in July, single-detached urban starts decreased by 0.8 per cent to 57,520 units.
“The decline in single starts is in line with CMHC’s expectations of buyers shifting demand away from higher priced new single-detached homes towards lower-priced alternatives,” the housing agency stated in a release.
In July, the seasonally adjusted annual rate of urban starts decreased in Ontario, the Prairies, Atlantic Canada and Quebec, while it increased in British Columbia.
That being noted, looking at the six-month trend of the monthly seasonally adjusted annual rates, the July figure comes to 185,586 units compared to 184,035 in June. CMHC uses this measure as a complement to the monthly SAAR of housing starts to account for “considerable swings in monthly estimates and obtain a more complete picture of the state of Canada’s housing market.”
Of course, Canada is a big country, made up of many diverse housing markets. To demonstrate that point, here’s a look at the monthly figures for two of the country’s hottest markets.
Greater Toronto Area
The standalone monthly SAAR in the GTA was 23,657 units in July, down from 30,623 units in June.
“Toronto housing starts decreased for the first time in five months, due to contracting apartment starts. However, strong sales of pre-construction condominium apartments over the past two years will convert to more starts as the year progresses,” said CMHC analyst Dana Senagama in a release. “Low-rise starts remained robust. A tighter resale market also resulted in demand spilling over into the new home market.”
The City of Toronto maintained the highest number of starts, most of which were apartment units, but also a large number of single-detached and row starts. The City of Vaughan and Brampton had the next highest number of starts, which was made up of mostly single-detached homes.
The standalone monthly SAAR was 27,359 units in July, up from 25,360 units in June. This increase was driven by a pick-up in apartment and townhome starts, which offset a small decline in single-detached home starts.
“Strong demand for all types of homes translated into higher levels of housing starts in July,” said CMHC analyst Robyn Adamache in a release. “The trend measure of single-detached house construction edged higher while apartment and town home building registered more substantial increases. These trends point to robust demand for homes across the price spectrum.”
For more, the complete Canada-wide July data set can be seen here.