There was a slight reduction in the number of newly-started housing construction projects in Canada last month, the Canada Mortgage and Housing Corporation (CMHC) reported.
Using seasonally adjusted annual rates (SAAR) to measure housing starts, the Crown Corporation reports the total number declined to 252,497 units from 253,296 in February. However, that's still historically high, remaining above 200,000 since June 2020. The slight month-over-month decrease occurred in Canada’s urban centres where, CMHC reported, the number of multi-unit dwellings fell to such a degree that they were partially countervailed by the notable increase of single-family detached housing starts.
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Of Canada’s three largest cities, only Montreal had more SAAR growth in March, which was the result of more multi-unit starts.
CMHC also noted that standalone monthly SAAR housing starts in all parts of the country declined by 2% to 246,243 in March from a month earlier, and the SAAR total in urban areas also decreased by 2% to 220,708. Multi-unit urban starts dropped by 5% to 154,876 units in March, however, single-detached starts in Canada’s urban areas rose by 8% to 65,832 units.
Rural starts were estimated at 25,535 units, CMHC said.
Housing Supply Declined Overall in March
The slight decline in new housing is also reflected in the resale market. The Canadian Real Estate Association (CREA) released its March sales statistics this morning, revealing transactions declined by 5.4% month-over-month and by 16.3% year-over-year, although March 2021 is an all-time sales record. Moreover, new listings dropped by 5.5% in March from a month earlier, which naturally drove prices up. The MLS Home Price Index rose by 1% on a monthly basis and by 27.1% year-over-year.
CREA also reported the national average sales price rose by 11.2% year-over-year in March to $796,000, largely because of the Greater Vancouver and Toronto regions, which accounted for $163,000 of the median home price.
New housing supply, and not just on the resale market, is crucial to stymieing rapid price appreciation. Earlier this month, the federal government announced that it is earmarking $10B to build 100,000 new homes in the next five years, including co-op and low-income housing, although there are doubts as to the veracity of such a plan.
