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The total monthly seasonally adjusted annual rate (SAAR) of housing starts in Canada decreased by 9% in June to 241,672 units from May's 264,929 units, according to the Canada Mortgage and Housing Corporation (CMHC). This decline reflects a broader trend in the housing market, as the six-month trend in housing starts also decreased by 0.4%, moving from 248,260 units in May to 247,205 units in June.
Monthly and Annual Trends in Housing Starts
The actual number of housings starts in urban centres with populations over 10,000 dropped by 13% year-over-year in June, falling from 23,518 units in June 2023 to 20,509 units. This decline was primarily driven by a significant decrease in multi-unit starts, which fell by 16%, while single-detached starts remained relatively stable compared to the previous year.
June's total housing starts were particularly lower in two of Canada’s largest cities. Toronto experienced a sharp 60% decline in housing starts, while Vancouver saw a 55% reduction, both heavily impacted by a drop in multi-unit construction. In contrast, Montréal saw a substantial increase of 226%, largely due to a surge in multi-unit activity.
Regional Variations in Housing Activity
The first half of 2024 saw mixed results across Canada’s six largest Census Metropolitan Areas (CMAs). Collectively, these regions experienced a modest 4% year-over-year increase in housing starts, driven by notable growth in Calgary, Edmonton, and Montréal. Conversely, Vancouver, Toronto, and Ottawa reported declines.
- Vancouver and Toronto: High interest rates and weak pre-construction sales in the condominium market have contributed to the slowdown in apartment starts in these cities. The impact of these economic factors is evident in the significant year-over-year decrease in housing starts.
- Montréal: The city observed a remarkable rebound in multi-unit construction, with apartment starts up 63% from the 8-year low recorded in 2023. This resurgence underscores a recovery in demand and a potential shift in market dynamics.
- Calgary and Edmonton: Both cities reported strong increases in housing starts across all dwelling types. Calgary's total starts rose by 38%, while Edmonton saw an even more substantial increase of 67%. This growth reflects robust market activity and potentially greater housing demand in these regions.
Market Outlook
The fluctuations in housing starts across Canada's major cities highlight the diverse and dynamic nature of the country's housing market. Factors such as interest rates, regional economic conditions, and consumer confidence play significant roles in shaping housing market trends. The decrease in overall housing starts in June suggests a cautious market outlook, with potential implications for future construction activity and housing supply.
