In May, the number of new homes that started construction in Canada trended lower compared to the previous month, but still remained at elevated levels.
According to the latest data released by the Canada Mortgage and Housing Corporation (CMHC), the trend in housing starts equaled 254,727 units last month, down by a little over 3,100 units from April’s 257,833 housing starts.
CMHC’s trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts. The organization says that it uses the trend measure to complement the monthly SAAR of housing starts to account “for considerable swings in monthly estimates and obtain a clearer picture of upcoming new housing supply.” Analyzing SAAR data alone could be misleading, since Canada’s multi-unit market segment tends to fluctuate month-to-month.
The standalone monthly SAAR of total housing starts for across Canada in May was 287,257 units, up eight per cent from April when there were 265,734 starts. In the same month, the SAAR for single-detached dwellings fell three per cent month-over-month from 81,438 homes to 78,879 units. Meanwhile, the SAAR of multi-unit starts increased 13 per cent across all areas of Canada, rising from 184,297 units to 208,378 units between April and May.
“On a trend and monthly SAAR basis, the level of housing starts activity in Canada is historically high, staying well above 200,000 units since 2020 and despite the lower trend, the monthly SAAR was higher from April to May,” said Bob Dugan, CMHC’s Chief Economist.
The SAAR of total urban starts grew eight per cent from April to May, rising from 243,897 units to 264,162 units. Rural starts were estimated at a seasonally adjusted annual rate of 23,095 units.
Some of the largest increases in total SAAR starts were recorded in Moncton, Brantford and London, which rose 346 per cent, 209 per cent and 146 per cent on a monthly basis. Barrie, Hamilton and Abbotsford-Mission experienced the steepest monthly declines in total SAAR starts, which decreased 72 per cent, 71 per cent and 59 per cent from April to May.
Toronto and Montreal saw their total SAAR starts rise 62 per cent and one per cent month-over-month, while Vancouver’s starts dropped 21 per cent over the same time period.
“The increase in monthly SAAR housing starts in Canada’s urban areas was driven by higher multi-unit starts in May,” said Dugan. “Among Vancouver, Toronto and Montreal, Vancouver was the only market to post a decrease in total SAAR starts, which was driven by lower multi-unit and single-detached starts.”
CMHC considers a housing start to have occurred when construction begins on a building where a dwelling unit is located, typically when concrete is poured for the footing around the structure or the equivalent stage when there is no basement.
