Canadian housing starts trend stable in December

OTTAWA, January 9, 2018 — The trend in housing starts was 226,777 units in December 2017, compared to 226,178 units in November 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.

“Despite the variation in activity across the country, the national trend in housing starts held steady at its highest level since 2008,” said Bob Dugan, CMHC’s chief economist. “Apartment starts in urban centres were up 6.2% in 2017 compared to 2016.”

Monthly highlights

Victoria

Metro Victoria finished 2017 with historically high housing starts. Multi-family structures accounted for the majority of housing starts, with elevated rental market starts pushing the total starts to its highest level since 1976. December of 2017 reflected this trend, with a 70% increase in multi-family starts compared to the previous year. Metro Victoria’s housing market showed strong price growth and overheating throughout the year, giving builders and developers strong incentive to break ground on new projects.

Vancouver

Total housing starts in the Vancouver CMA increased in December 2017 compared to the previous month after posting one of the highest levels of monthly multi-family starts for the year. In particular, apartment condominium starts were elevated in Vancouver, Richmond and Coquitlam as low inventories on the resale market continue to encourage new development. Although total starts in 2017 were lower than 2016 due to constraints in construction labour and equipment, new home construction remained strong from a historical point-of-view due to continued demand for housing.

Calgary

The trend in total housing starts declined in December 2017 as the pace of single-detached and multiple construction decreased compared to the previous month. Despite the decline in the trend, total actual housing starts for 2017 were up 25% year-over-year. The housing market in Calgary has been recovering from the economic slowdown. Consumer confidence and labour market conditions have improved while the population continued to increase. This has helped support demand for new housing.

Winnipeg

In the Winnipeg CMA, the moderating trend in total starts observed over the last half of 2017 ended in December with both single-family and multi-family experiencing gains compared to the previous month. On a year-over-year basis, total actual housing starts more than doubled this December compared to December 2016 with the multi-family sector leading this increase, particularly new apartment projects. Single-detached starts also saw strong year-over-year growth. December rounds out the strongest year of new housing activity in Winnipeg since the late 1980s as recorded by CMHC. A background of stable employment, wage growth and last year’s record in-migration has supported the market. In addition, the introduction of an impact fee in Winnipeg contributed to an acceleration in housing starts in the city during the first half of 2017.

Belleville

Belleville builders started 104 homes in December, the highest number of starts in any given month since February 2009. Half of the total starts were rental apartments. These new rental units will contribute needed supply to the market, as the apartment vacancy rate in Belleville has been trending lower since 2013, falling to 2.2% in 2017. The total number of housing starts in 2017 was the highest since 1990, driven up by the rise in single-detached and apartment starts.

Greater Sudbury

There were 10 new homes started in the Greater Sudbury Census Metropolitan Area in December bringing the total number of new home starts in 2017 to 195; the lowest number of annual starts since 2001. The underwhelming year in starts was attributable to poor employment prospects faced by younger groups aged 15 to 44 and the resultant net out-migration from these groups. Competition from a balanced resale market was a further limitation to new home construction in 2017.

Ottawa

Total starts in the Ottawa CMA were at their highest level since 2009 for the month of December, driven mainly by purpose-built rental apartment starts. For the year, apartment starts were evenly split between purpose-built rentals and condominiums, and came in at more than double last years’ number. Just shy of 7,500 units, Ottawa total starts were at their highest level since 2002. Strong economic and demographic fundamentals boosted the demand in 2017, encouraging builders to increase construction activity.

Toronto

Overall, the pace of new home construction in the Toronto Census Metropolitan Area (CMA) remained virtually unchanged in 2017. Close to 39,000 homes broke ground this year, down 0.7% from 2016. Strong demand for new homes continued to be supported by improved employment conditions and strong migration. However, affordability challenges, tighter mortgage rules, increasing price gap with resale market alternatives, and a better-supplied resale market weighed on single-detached starts, which were down by 14% compared to 2016. Given escalating house prices, more homebuyers continued to shift their demand towards relatively more affordable housing options such as townhouses, and more affordable areas such as Brampton. Condominium apartment starts were down by 5% compared to 2016, nevertheless they continued to dominate new home construction thanks to strong demand from price-sensitive homebuyers and investors.

Québec CMA

Residential construction in the Québec area was strong in 2017. In all, 6,640 housing starts were recorded, for a gain of 39% over 2016. This hike was attributable to the start of several large apartment projects throughout the year. In particular, conventional rental housing construction maintained a historically high pace, with over 2,500 units started. As well, the seniors’ housing segment stood out with a record level of 1,334 new units. The strong labour market and the needs and preferences of older households seem to have stimulated demand for apartments in the area, but caution should be exercised as the rapidly rising supply could outpace this demand.

Montréal

The Montréal CMA ended the year with 24,756 housing starts — a high level compared to recent years. Of this number, some 19,400 were for apartments (rental and condominium), a level not seen since the end of the 1980s. This jump can be explained by several factors: the decrease in inventories of new and existing condominiums for sale on the market, urban densification, and the drop in the vacancy rate on the Montréal rental market.

Halifax

December housing starts trended higher in Halifax in both the single-detached and multiples markets. After slowing for three consecutive years, single-detached starts began to pick up pace in 2016 and continued on that upward trend throughout 2017, recording growth of 30% by year-end. Despite this uptick in single-detached construction, demand for rental accommodations supported by a declining vacancy rate continues to dominate the residential construction market in Halifax with over 2,000 multiples units breaking ground in 2017, up 16% compared to 2016.

Prince Edward Island (PEI)

Prince Edward Island’s strong construction season has extended well into December. Strong immigration over the past few years has fueled housing demand in the province of PEI, primarily in the Charlottetown area. This has helped to push single-detached starts up to their highest level since 2008. In all, starts were up 70% year-over-year in 2017.

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 216,980 units in December, down from 251,675 units in November. The SAAR of urban starts decreased by 15.1% in December to 198,132 units. Multiple urban starts decreased by 22% to 135,176 units in December. Single-detached urban starts increased by 4.7% to 62,956 units.

Rural starts were estimated at a seasonally adjusted annual rate of 18,848 units.

Preliminary Housing Starts data are also available in English and French through our website and through CMHC’s Housing Market Information Portal. Our analysts are also available to provide further insight into their respective markets.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, follow us on Twitter, YouTube, LinkedIn and Facebook.

Information on this release:

Angelina Ritacco
416-218-3320
aritacco@cmhc-schl.gc.ca

Additional data is available upon request.


 
    Preliminary Housing Start Data in Centres 10,000 Population and Over
  Single-Detached All Others Total
Dec. 2016 Dec. 2017 % Dec. 2016 Dec. 2017 % Dec. 2016 Dec. 2017 %
Provinces (10,000+)
N.-L. 70 77 10 18 56 211 88 133 51
P.E.I. 7 22 214 6 17 183 13 39 200
N.S. 117 110 -6 111 167 50 228 277 21
N.B. 47 60 28 52 103 98 99 163 65
Atlantic 241 269 12 187 343 83 428 612 43
Qc 536 542 1 2,645 4,101 55 3,181 4,643 46
Ont. 2,638 2,091 -21 3,789 2,858 -25 6,427 4,949 -23
Man. 143 223 56 110 351 219 253 574 127
Sask. 154 121 -21 174 194 11 328 315 -4
Alta. 909 984 8 1,054 703 -33 1,963 1,687 -14
Prairies 1,206 1,328 10 1,338 1,248 -7 2,544 2,576 1
B.C. 696 843 21 2,476 3,169 28 3,172 4,012 26
Canada (10,000+) 5,317 5,073 -5 10,435 11,719 12 15,752 16,792 7
Metropolitan Areas                  
Abbotsford-Mission 39 26 -33 27 13 -52 66 39 -41
Barrie 36 28 -22 0 43 ## 36 71 97
Belleville ** 37 ## ** 67 ## ** 104 ##
Brantford 11 11 - 10 2 -80 21 13 -38
Calgary 294 349 19 681 334 -51 975 683 -30
Edmonton 409 412 1 303 305 1 712 717 1
Greater Sudbury 14 6 -57 23 4 -83 37 10 -73
Guelph 17 18 6 17 0 -100 34 18 -47
Halifax 64 90 41 92 166 80 156 256 64
Hamilton 111 59 -47 655 268 -59 766 327 -57
Kelowna 81 84 4 235 177 -25 316 261 -17
Kingston 20 55 175 26 17 -35 46 72 57
Kitchener-Cambridge-Waterloo 120 57 -53 669 138 -79 789 195 -75
Lethbridge ** 45 ## ** 22 ## ** 67 ##
London 112 150 34 81 52 -36 193 202 5
Moncton 18 13 -28 8 35 338 26 48 85
Montréal 206 232 13 1,696 3,151 86 1,902 3,383 78
Oshawa 39 117 200 81 18 -78 120 135 13
Ottawa-Gatineau 281 308 10 417 599 44 698 907 30
Gatineau 67 48 -28 105 48 -54 172 96 -44
Ottawa 214 260 21 312 551 77 526 811 54
Peterborough 25 32 28 0 24 ## 25 56 124
Québec 51 52 2 265 390 47 316 442 40
Regina 43 29 -33 111 35 -68 154 64 -58
Saguenay 33 16 -52 15 30 100 48 46 -4
St. Catharines-Niagara 114 152 33 19 26 37 133 178 34
Saint John 8 12 50 3 26 ## 11 38 245
St. John's 61 62 2 17 39 129 78 101 29
Saskatoon 96 76 -21 46 144 213 142 220 55
Sherbrooke 18 32 78 77 52 -32 95 84 -12
Thunder Bay 4 3 -25 4 0 -100 8 3 -63
Toronto 1,350 767 -43 1,635 1,473 -10 2,985 2,240 -25
Trois-Rivières 21 12 -43 75 45 -40 96 57 -41
Vancouver 284 402 42 1,870 2,306 23 2,154 2,708 26
Victoria 67 70 4 79 134 70 146 204 40
Windsor 52 35 -33 39 2 -95 91 37 -59
Winnipeg 130 181 39 100 322 222 230 503 119
Total 4,229 4,030 -5 9,376 10,459 12 13,605 14,489 6

Data for 2016 based on 2011 Census Definitions.
Data for 2017 based on 2016 Census Definitions.
Source: Market Analysis Centre, CMHC

** Belleville and Lethbridge were not metropolitan areas in 2016.
## not calculable/extreme value

Preliminary Housing Start Data — Seasonally Adjusted at Annual Rates (SAAR)
  Single-Detached All Others Total
Nov. 2017 Dec. 2017 % Nov. 2017 Dec. 2017 % Nov. 2017 Dec. 2017 %
Provinces (10,000+)  
N.L. 574 772 34 783 678 -13 1,357 1,450 7
P.E.I. 270 410 52 660 204 -69 930 614 -34
N.S. 703 1,043 48 2,257 2,036 -10 2,960 3,079 4
N.B. 781 776 -1 1,259 1,661 32 2,040 2,437 19
Qc 6,835 6,729 -2 37,785 40,935 8 44,620 47,664 7
Ont. 23,504 24,403 4 70,552 36,515 -48 94,056 60,918 -35
Man. 2,538 3,062 21 3,888 4,212 8 6,426 7,274 13
Sask. 1,526 1,653 8 2,064 2,328 13 3,590 3,981 11
Alta. 11,466 12,402 8 21,095 8,702 -59 32,561 21,104 -35
B.C. 11,933 11,706 -2 32,957 37,905 15 44,890 49,611 11
Canada (10,000+) 60,130 62,956 5 173,300 135,176 -22 233,430 198,132 -15
Canada (All Areas) 73,999 77,693 5 177,675 139,286 -22 251,675 216,980 -14
Metropolitan Areas                  
Abbotsford-Mission 695 424 -39 1,344 156 -88 2,039 580 -72
Barrie 956 525 -45 876 516 -41 1,832 1,041 -43
Belleville 483 402 -17 216 804 272 699 1,206 73
Brantford 139 137 -1 24 24 - 163 161 -1
Calgary 4,197 4,206 0 13,368 4,008 -70 17,565 8,214 -53
Edmonton 4,418 5,432 23 6,312 3,660 -42 10,730 9,092 -15
Greater Sudbury 156 85 -46 72 48 -33 228 133 -42
Guelph 270 319 18 3,000 0 -100 3,270 319 -90
Halifax 666 957 44 2,052 1,992 -3 2,718 2,949 8
Hamilton 763 782 2 4,392 3,216 -27 5,155 3,998 -22
Kelowna 854 934 9 1,740 2,124 22 2,594 3,058 18
Kingston 93 581 ## 132 204 55 225 785 249
Kitchener-Cambridge-Waterloo 935 829 -11 6,840 1,656 -76 7,775 2,485 -68
Lethbridge 455 429 -6 72 264 267 527 693 31
London 1,879 2,116 13 5,736 624 -89 7,615 2,740 -64
Moncton 187 183 -2 1,092 420 -62 1,279 603 -53
Montréal 2,802 2,885 3 22,993 37,492 63 25,795 40,377 57
Oshawa 1,502 1,554 3 2,256 216 -90 3,758 1,770 -53
Ottawa-Gatineau 2,766 3,427 24 9,444 7,188 -24 12,210 10,615 -13
Gatineau 500 667 33 396 576 45 896 1,243 39
Ottawa 2,266 2,760 22 9,048 6,612 -27 11,314 9,372 -17
Peterborough 197 371 88 0 288 ## 197 659 235
Québec 729 688 -6 11,700 4,680 -60 12,429 5,368 -57
Regina 396 419 6 1,224 420 -66 1,620 839 -48
Saguenay 244 229 -6 492 360 -27 736 589 -20
St. Catharines-Niagara 1,199 1,561 30 1,584 312 -80 2,783 1,873 -33
Saint John 261 146 -44 24 312 ## 285 458 61
St. John's 402 580 44 624 468 -25 1,026 1,048 2
Saskatoon 893 1,005 13 720 1,728 140 1,613 2,733 69
Sherbrooke 260 391 50 1,560 624 -60 1,820 1,015 -44
Thunder Bay 148 65 -56 144 0 -100 292 65 -78
Toronto 8,907 8,224 -8 36,168 17,676 -51 45,075 25,900 -43
Trois-Rivières 173 143 -17 420 540 29 593 683 15
Vancouver 6,128 5,876 -4 24,864 27,672 11 30,992 33,548 8
Victoria 836 1,075 29 1,344 1,608 20 2,180 2,683 23
Windsor 568 518 -9 1,152 24 -98 1,720 542 -68
Winnipeg 1,897 2,559 35 3,492 3,864 11 5,389 6,423 19

Data based on 2016 Census Definitions.
Source: Market Analysis Centre, CMHC
## not calculable / extreme value

Canada

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