Canadian Housing Starts Fall in 2023 After Banner Years
Following record and near-record highs in 2021 and 2022, housing starts fell last year.
2023 starts dipped seven per cent in urban areas with a population of 10,000 or more from 2022, according to Canada Mortgage and Housing Corporation (CMHC).
The decline was driven mainly by a 25 per cent drop in single-detached starts and tighter economic conditions affecting multi-unit starts in the final quarter.
“The recent monthly multi-unit volatility is not surprising as we’re now starting to see 2023’s challenging borrowing conditions and labour shortages in the housing starts numbers,” says CMHC’s chief economist Bob Dugan, who adds that the national housing agency expects to see continued downward pressure in the coming months.
Despite the national decline, actual 2023 housing starts were five per cent and 28 per cent higher than in 2022 in Toronto and Vancouver, respectively, driven by higher multi-unit starts. Montreal starts were 37 per cent lower due to large declines in both single-detached and multi-unit starts.
The monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada increased 18 per cent in December to 249,255 units, up from 210,918 in November.
In urban areas, housing starts rose 20 per cent month-over-month, with 234,705 units recorded. Multi-unit starts increased 26 per cent to 191,463 units, while single-detached starts decreased two per cent to 43,242.
Total SAAR housing starts were down 35 per cent in Toronto, driven by a significant decline in multi-unit starts. Montreal and Vancouver both posted gains of 66 per cent and 92 per cent, respectively, due to sizeable increases in multi-unit starts.
The rural starts monthly SAAR estimate was 14,550 units.