Housing start levels remain 'historically high'
The number of new homes being built in Canada dropped slightly between May and June, but housing start levels remain at a high.
New data released by the Canada Mortgage and Housing Corporation (CMHC) shows that the standalone monthly seasonally adjusted annual rates (SAAR) of housing starts for all areas in Canada during June was 273,841 units. This marks a three per cent drop from May, when there were 282,188 unit starts nationwide.
The SAAR of total urban starts also fell three per cent over the same time period, down from 264,578 units to 257,438 units between May and June. Multi-unit urban starts decreased two per cent from 201,874 units to 197,022 units, while single-detached urban starts declined four per cent from May to June from 62,704 units to 60,416 units. Rural starts were estimated at a SAAR of 16,403 units.
CMHC defines a housing start to have been initiated when construction begins on a building where a dwelling unit is located. This tends to happen when concrete is poured for the footing around the structure or the equivalent stage when there is no basement.
"The monthly SAAR was lower in June compared to May; however, the level of housing starts activity in Canada remains historically high and well above 200,000 units since 2020,” said Bob Dugan, CMHC’s chief economist, in the monthly starts report. “The decrease in monthly SAAR housing starts in Canada’s urban areas was driven by lower single-detached starts in June.”
Toronto, Vancouver and Montreal reported a monthly increase of 27 per cent, 32 per cent and five per cent to their total SAAR starts in June, which resulted in 49,860, 32,420 and 36,469 unit starts for all housing types in each city that month.
“Vancouver, Toronto and Montreal all recorded higher total SAAR starts, driven by higher multi-unit starts except for Montreal where single-detached starts posted a higher increase,” said Dugan.
Between May and June, Thunder Bay, Guelph and Kelowna reported some of the biggest increases to their monthly SAAR starts, which rose 353 per cent, 341 per cent and 304 per cent month-to-month, respectively. Meanwhile, Saint John and Gatineau reported a 72 per cent and 82 per cent decrease in the number of their total monthly SAAR starts over the same period.
When analyzing Canadian housing starts as a long-term trend, starts grew in June. CMHC reported that the trend in housing starts was 258,295 units last month, an increase from 252,444 units in May.
The trend measure is a six-month moving average of the monthly SAAR of housing starts. CMHC says that it uses the trend measure as a “complement” to the monthly SAAR of housing starts to account for changes in monthly estimates and to gain a better picture of upcoming new housing supply. Analyzing only SAAR data can be misleading as the multi-unit segment that largely drives the market can change significantly on a monthly basis.
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