Pace of Housing Starts on Downward Trajectory

Canadian housing starts continued to trend lower in October.

“The six-month trend in housing starts declined from September to October, as the retreat in total starts from their earlier 2021 levels continued,” says Canada Mortgage and Housing Corp.’s (CMHC) chief economist, Bob Dugan.

Housing starts were down 2.4 per cent month-over-month, to 264,264 units in October, from 270,661 units in September.

This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“For SAAR housing starts in Canada’s urban areas, a slight increase in single-detached starts didn’t offset a larger decrease in multi-family starts in October, and led to a decline in overall starts for the month,” explains Dugan. “Among Vancouver, Toronto and Montreal, Vancouver was the only market to register growth in total SAAR starts in October, due to a rebound from the prior month in the multi-family segment.”

In spite of this, the level of housing starts activity remains high in historical terms, on a trend and monthly SAAR basis.

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 more complete picture of Canada’s housing market. In some situations, analyzing only SAAR data can be misleading, as the multi-unit segment largely drives the market and can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 236,554 units in October, a decrease of 5.3 per cent from 249,922 units in September. The SAAR of urban starts dipped by 3.7 per cent in October to 214,797 units. Multiple urban starts decreased by 5.3 per cent to 156,781 units in October, while single-detached urban starts increased by one per cent to 58,016 units.

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