The Canada Mortgage and Housing Corporation released its housing starts data for March 2019, but there’s not much to get too excited about as construction remained steady to wrap up the first quarter of the year.
The housing starts trend for March 2019 was 202,279 units, compared to 202,039 in February 2019. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
"The national trend in housing starts was essentially unchanged in March, remaining near its historical average," says Bob Dugan, CMHC's chief economist. "The trend has been very stable since the final quarter of 2018, following a period of steady declines from the historically elevated levels registered in recent years. Higher mortgage rates combined with still-favourable, but less stimulative economic conditions have contributed to moderation in demand for new homes in urban centres."
The standalone monthly SAAR of housing starts was 192,527 units, which is 15.8% higher than February 2019. The SAAR of urban starts increased 17% to 178,033 units, with multiple starts up 18.6% to 135,894 and detached starts up 12.1% to 42,139. Rural starts are estimated around 14,494 units.
In Toronto Census Metropolitan Area, the housing starts trend went up due to condo starts. CMHC says that Toronto’s strong condo sales over the last two years will keep starts high throughout 2019, and will most likely offset the decline in low-rise starts. The high cost of low-rise housing slowed sales in 2018, which has led to fewer starts and less construction in Toronto.
It’s a different story in areas like St. Catharines-Niagara though. The upward housing starts trend continued to hit an 11-month high in March, dominated by single detached and townhome starts.
The relatively affordable homes in the St. Catharines-Niagara region are attracting buyers from neighbouring regions. In some cases, you can get a detached home in St. Catharines for less than the price of the average condo in Toronto. As older millennials look to move-up, we could see more couples wanting to start families moving away from Toronto.
There could be an interesting shift ahead of us. It seems like yesterday we were talking about millennials looking for starter condos in Toronto. Now we’re seeing some millennials closer to 40 years of age who are ready for more square footage.
That said, younger millennials, closer to 23 years old, are still saving up and hoping to call a bustling urban centre like Toronto home.
We’re looking forward to seeing how aging millennials impact the new home market and construction in the near future!