Housing starts higher in August
OTTAWA – Housing starts across the country climbed in August by all three of the measures used by the Canada Mortgage & Housing Corporation (CMHC), although the rosy national picture continued to mask significant regional differences, particularly across the Prairies.
The federal housing authority reported that its trend measure of housing starts for August came in at 218,998 units, up from 208,931 units in July 2019. The trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
“The national trend in housing starts increased in August,” CMHC chief economist Bob Dugan said in a statement. “Higher trending single-detached starts in urban centres in July and August following roughly a year of declines combined with higher-trending multi-family units in August to push the total starts trend to its highest level since June 2018.”
CMHC uses the trend measure to complement the monthly SAAR of housing starts, which can be misleading as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.
The standalone monthly SAAR of housing starts for all areas in Canada was 226,639 units in August, up 1.9% from 222,467 units in July. The SAAR of urban starts increased by 2.0% in August to 213,663 units. Multiple urban starts decreased by 1.4% to 160,388 units in August while single-detached urban starts increased by 13.6% to 53,275 units.
Rural starts were estimated at a seasonally adjusted annual rate of 12,976 units.
In a reversal from most prior months so far this year, actual starts of single-family homes climbed 4% to a preliminary 4,920 units in August, compared to 4,743 units in August 2018. Regionally, they climbed in Atlantic Canada and Ontario and were flat in Quebec while falling across the Prairies and in British Columbia.
For the year-to-date, single family starts totalled 29,668 units – an 18% decline from the 36,314 units for the comparable period last year. They fell in every region of the country, from 5% in Quebec to 21% in Ontario.
Meanwhile, starts in the multi-unit segment – whether apartments, townhouses or other linked dwelling for either the rental or condominium markets – continued to climb, advancing 16% to a preliminary 12,691 units in August, compared top 10,973 units last year.
For the year-to-date, this segment starts were pegged at 99,643 units – up 7% from 91,159 units for the same period in 2018. Starts were up in Atlantic Canada, Quebec and B.C. but down in Ontario and the Prairies.
Total housing starts were up 12% in August at 17,611 units. However, for the first eight months of the year they were essentially flat at 127,313 units. As with the month of August, for the year starts were up in Atlantic Canada, Quebec and B.C. and down in Ontario and the Prairies.
“Canadian homebuilding simply won't quit,” Rishi Sondhi of TD Economics remarked in her research note, adding that so far in the third quarter, starts were slightly higher than those in the second quarter.
“Combined with a probable rise in home sales, this suggests a healthy quarter is in store for residential investment in Q3,” she continued, adding, “Moving forward, homebuilding is likely to remain strong through the remainder of this year, as solid demand fundamentals – namely low mortgage rates, healthy population growth and solid labour markets – underpin construction.”