Following a nominal decline in November, Canada’s new construction segment experienced a tepid December, with overall housing starts sinking more than 5% month over month.
In a report released today, the Canada Mortgage and Housing Corporation (CMHC) put the seasonally adjusted annual rate (SAAR) of housing starts at 248,625 units in December, down from 263,022 units in November.
The national housing agency also reported that, in December, the SAAR of urban starts fell 5% to 227,708 units, multi-unit urban starts fell 4% to 182,850 units, and single-detached urban starts fell 11% to 44,858 units. Rural starts clocked in at a SAAR of 20,917 units.
The six-month moving trend in housing starts -- a measure used in tandem with SAAR data to account for considerable swings in monthly estimates, particularly with respect to the multi-unit segment, for which analyzing only SAAR data can be misleading -- sat at 269,930 units in December, declining more than 1% from 273,801 units in November.
“The 2022 year ended with a slight decline for both the monthly SAAR of housing starts and the trend at the national level in December; however, Toronto, Montreal, and Vancouver all posted increases in total SAAR housing starts, with Toronto posting a significant increase of 72% in December,” notes Bob Dugan, CMHC's Chief Economist.
In addition, housing starts in the Toronto Census Metropolitan Area -- 45,109 units in 2022 -- were up 7.6% from the year prior, reaching the highest level since 2012. CMHC attributes the gains “entirely” to the multi-unit segment. There were 38,780 multi-unit starts in 2022 -- the largest number on record -- with the majority being apartments and condominiums.
Meanwhile, housing starts in Vancouver totalled 25,983 units in 2022, remaining more or less unchanged from 2021. This is reflective of higher mortgage interest rates, which are limiting home-buying power and shifting demand to the rental segment.
Dugan also points out that, on a national basis, the total number of starts recorded in 2022 outpaced that of the year prior.
“The rate of new construction continued at an elevated pace in 2022 overall, ending the year with actual total urban starts at 240,590 units (-1%) in Canada, similar to levels observed in 2021 (244,141 units),” he says. “While these additional units will provide much needed supply on the market, demand for housing in the country will continue to grow. We need to find innovative ways to deliver more housing supply and keep building at a higher pace in the coming years in order to improve affordability.”
