Canadian housing starts fell 3% in June.
With that said, there's reason for some optimism on the country’s housing supply front: the level of starts remains historically high. Despite a month-to-month decline, the overall six-month trend in starts was up in June.
This morning, the Canadian Mortgage and Housing Corporation (CMHC) said that Canada’s new builds for June came in at a seasonally adjusted annualized rate of 273,841 units -- down 3% from the previous month.
This is largely attributed to a drop in the construction of multifamily homes, says CMHC.
The trend in housing starts -- a six-month moving average of the seasonally adjusted annual rate (SAAR) of housing starts -- was 258,295 units in June, up from 252,444 units in May.
New homes under construction
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 clearer picture of upcoming new housing supply. In some situations, analyzing only SAAR data can be misleading, cautions CMHC, as the multi-unit segment largely drives the market and can vary significantly from one month to the next.
"The monthly SAAR was lower in June compared to May; however, the level of housing starts activity in Canada remains historically high and well above 200,000 units since 2020," said Bob Dugan, CMHC's Chief Economist. "The decrease in monthly SAAR housing starts in Canada's urban areas was driven by lower single-detached starts in June. Vancouver, Toronto, and Montreal all recorded higher total SAAR starts, driven by higher multi-unit starts except for Montreal where single-detached starts posted a higher increase."
The standalone monthly SAAR of total housing starts for all areas in Canada in June was 273,841 units, a decrease of 3% from May. The SAAR of total urban starts decrease by 3% to 257,438 units in June. Multi-unit urban starts declined by 2% to 197,022 units, while single-detached urban starts decreased by 4% to 60,416 units, says CMHC. Rural starts were estimated at a seasonally adjusted annual rate of 16,403 units.
While things are progressing when it comes to providing more homes for Canadians, a report released last month from CMHC found that current construction projections are still 3.5M units short of what is needed in order to address the supply and demand imbalance in the market.