The number of newly-launched housing construction projects has slowed considerably since the spring, and October was no exception. According to the latest data from the Canada Mortgage and Housing Corporation (CMHC), the seasonally adjusted annual rate (SAAR) of new starts declined 11% last month, with shovels hitting the ground on just 267,055 units nation-wide.
That’s a turnaround from the year’s high in September, when 298,811 units broke ground. Overall, urban starts fell 11%, with the most pain felt in the multi-unit sector (-13%) at 188,189 units, while single-detached houses dipped by 4% to 57,045 units.
Meanwhile, an estimated total of 21,821 starts kicked off in rural markets.
From a monthly perspective, the trend for new builds -- a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts -- edged up 0.5% from September with 276,374 units.
“Monthly SAAR declined in October, while the six-month trend in housing starts slightly increased. October’s decrease in monthly SAAR housing starts in Canada’s urban areas was driven by both lower multi-unit and single-detached starts,” stated Bob Dugan, CMHC's Chief Economist.
“Among Montreal, Toronto and Vancouver, Montreal was the only market to post an increase in total SAAR housing starts, driven by a 19% increase in multi-unit activity. Toronto, down 47% and Vancouver, down 19%, contributed to the overall monthly decline in SAAR housing starts for Canada. Despite this, Housing starts activity remains elevated in Canada in 2022.”
Construction has slowed considerably this year due to a mix of elevated building costs, rising interest rates, and softening buyer demand; according to the September numbers from the Building Industry and Land Development Association (BILD), sales plunged for both condo and single-family new homes, down 89% and 96%, respectively, with year-to-date sales dipping by -20.8% and 67.9%.
Such conditions haven’t been experienced since 2018, when a slew of challenges -- including new foreign buyer taxes, interest rates, and new development charges -- chilled the market.
Meanwhile, a separate data set from Urbanation recorded a 79% decline in sales for the third quarter, with just 1,748 new condo transactions. That marks the second-lowest quarter since Q1 2009, when only 887 units traded hands amid the financial crisis.