Housing starts trend continues steady decline

The trend in housing starts has been declining steadily since November 2022. In May, the trend was 230,205 units, down 4.2% from 240,318 units in April, says the Canada Mortgage and Housing Corporation (CMHC). The trend measure is a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada. The standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada declined 23% in May (202,494 units) compared to April (261,357 units). The monthly SAAR of total urban starts (centres 10,000 population and over) declined 24%, while multi-unit urban starts declined 30% and single-detached urban starts increased 6%. The Vancouver, BC, consensus metropolitan area (CMA) starts were down 45%; the Toronto, ON, CMA starts were down 28%; and the Montreal, QC, CMA starts were down 35%. All three recorded increases in single-detached starts that were offset by large decreases in multi-unit starts. “The decline in housing starts is due to constraints in new construction, including labour shortages and higher construction and borrowing costs, which is considerably affecting multi-unit starts. Despite this, starts have only declined to the relatively high levels observed prior to 2020,” says Bob Dugan, CMHC's chief economist.