Housing starts down by 15 per cent in January

The annual pace of housing starts dropped by 15 per cent last month, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC).

Source: Adobe Stock

The annual pace of housing starts dropped by 15 per cent last month, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC).

“While actual starts in January were flat, the six-month trend has decreased for the fourth consecutive month, which is in line with recent signs of slowing momentum in residential construction,” said CMHC deputy chief economist Tania Bourassa-Ochoa.

The seasonally adjusted annual rate (SAAR) of housing starts was 238,049 units in January, compared with 280,668 units in December. This decline more than offset the increase observed in the previous month.

“Among Canada’s big three cities, Vancouver recorded a 37 per cent increase in actual starts due to higher multi-unit and single-detached starts,” reads the report. “Toronto declined 2 per cent due to lower single-detached starts. Montreal posted a 44 per cent year-over-year decrease this month, driven by lower multi-unit and single-detached starts.”

Meanwhile, actual housing starts were up one per cent year-over-year in centres with a population of 10,000 or greater.

The SAAR estimate for rural starts was 20,485 units.

The six-month moving SAAR average of housing starts was down 3.5 per cent last month at 254,794 units.

“We expect new construction to continue trending lower going forward as trade and geopolitical uncertainty, high construction costs, weaker demand, and rising inventories continue to constrain developer activity,” Bourassa-Ochoa said. “As a result, near-term improvements in housing supply are unlikely, reflecting the on-the-ground sentiments we’ve heard from developers over the past several months.”