Canadian Housing Starts Trend Stable in December

OTTAWA, Jan. 9, 2018 /CNW/ - 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."

Bob Dugan, Chief Economist, CMHC (CNW Group/Canada Mortgage and Housing Corporation)

Logo: Government of Canada (CNW Group/Canada Mortgage and Housing Corporation)

Housing Starts in Canada - All Areas December 2017 (CNW Group/Canada Mortgage and Housing Corporation)

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 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 City
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.

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Additional data is available upon request. 

Preliminary Housing Start Data in Centres 10,000 Population and Over
		Single-Detached			All Others			Total
		December 2016	December 2017	%	December 2016	December 2017	%	December 2016	December 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
		November 2017	December 2017	%	November 2017	December 2017	%	November 2017	December 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

SOURCE Canada Mortgage and Housing Corporation

For further information: Angelina Ritacco, CMHC, 416-218-3320, [e-mail]

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