Published On: Friday, 11 August 2017

Canadian Residential Housing Starts Trend Increased in July

Canadian Residential Housing Starts Trend Increased in July
(Graphic Credit: CMHC)

CANADA - The trend in housing starts was 217,550 units in July 2017, compared to 215,175 units in June 2017, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“In July, Canada’s pace in housing construction ramped up for a seventh consecutive month,” says Bob Dugan, CMHC’s chief economist. “British Columbia and Alberta were the main contributors to the higher trend in housing starts. While BC’s construction coincides with near-record low completed and unsold units in the past few months, Alberta’s inventory of new unsold homes is ramping up, highlighting the need for managing inventories.”

Monthly highlights include:

  • Vancouver
    • Vancouver CMA housing starts were up slightly in July due to the construction of more townhomes and apartments getting underway. The largest increase in construction activity occurred in Burnaby, New Westminster and Coquitlam, as the relative affordability of more modestly priced townhomes and apartments in these communities supported consumer demand. The number of units under construction in the Vancouver CMA remains near record highs, and developers will be keeping an eye on market conditions as these projects are completed in the coming year.
  • Calgary
    • After a slow start, the trend in new home construction this year has increased, moving closer in line with historical averages. Multiple starts in particular have been strong in recent months, including July, despite inventories sitting at near record highs. If the current pace of production does not ease, there is the possibility that inventories will stay elevated for an extended period of time.

CMHC uses the trend 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 Canada’s housing market. In some situations analyzing only SAAR data 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 222,324 units in July, up from 212,948 units in June. The SAAR of urban starts increased by 5.5 per cent in July to 206,122 units. Multiple urban starts increased by 10.4 per cent to 141,950 units in July and single-detached urban starts decreased by 3.9 per cent, to 64,172 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,202 units.

Additional information and statistics are available at the following link.