National housing starts took a breather in October 2019, according to the latest report from the Canada Mortgage and Housing Corporation.
October 2019 housing starts trended at 218,598 units on a national level, down slightly from 223,276 in September 2019. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
"The national trend in housing starts decreased in October," says Bob Dugan, CMHC's chief economist. "Multi-family starts in urban centres trended lower following four months of consecutive gains, offsetting a modest increase in the trend of urban single-detached starts in October.”
The standalone monthly SAAR of urban starts came in at 201,973 units, down 8.7% month-over-month. Urban starts fell 9% to 189,304 units, with urban multi-unit starts dropping 12.5% with 139,518 units and urban detached starts up 2.4% with 49,786 units. Rural starts were estimated at 12,669 units.
In Thunder Bay, apartment starts were the highest they’ve been in almost two years, mostly due to rental construction. The 65+ age segment is the fastest growing in Thunder Bay, so the demand for rental apartments is strong.
Housing starts in Toronto trended lower due to fewer multi-unit starts. Despite the drop, Toronto has had strong pre-construction sales over the last two years, so construction will remain steady for a while.
In the second half of 2018, Toronto also saw an uptick in detached home sales, and many of these are starting to break ground now. Single-family home sales were strong in 2019, too, so detached starts will likely remain steady well into 2020.
In Hamilton, housing starts trended up with an increase in detached and multi-unit starts. There’s been a shift in demand to lower priced homes, plus a consistent demand for rental units, so the demand for apartment housing is strong in Hamilton.
Last year was kind of slow for new home sales in the Greater Toronto and Hamilton Area, but construction has been steady due to many sales in 2016 and 2017. This year, activity has outpaced 2018, so we can expect housing starts to perform well through 2020.