The Canada Mortgage and Housing Corporation (CMHC) released its housing starts report for May 2017, announcing that starts trended upwards last month. In May 2017, Canadian housing starts trended at 214,621 units, a slight increase compared to April’s 213,435. The trend is a six month moving average of seasonally adjusted annual rates (SAAR).
“Housing starts trended higher in May in Canada’s urban areas,” says Bob Dugan, CMHC’s Chief Economist. “Row and apartment units led the upward move, while construction has slowed for pricier single- and semi-detached houses.”
While starts trended higher across the country, Toronto experienced a 44% drop due to a decrease in single detached and row home starts. This is the first decrease in detached starts in Toronto since September 2016. According to CMHC, the recent increase in resale listings in the Greater Toronto Area (GTA) will cause less spillover into the new home market, which in turn will cause fewer starts.
Out in Kitchener-Cambridge-Waterloo (the Golden Triangle area), housing starts trended upwards due to plenty of construction for all housing types. The demand for detached homes and townhomes in this area has been very strong since the beginning of the year.
Homebuyers are looking at the Golden Triangle as an affordable alternative to the GTA. CMHC says that a detached home in Kitchener-Cambridge-Waterloo is approximately half the price of the same type of home in Toronto. We’re interested to see if this holds true if GTA resale supply continues to grow.
The standalone SAAR last month was 194,663 units, a drop from April’s 213,948. The SAAR of urban starts dropped 10.2% to 178,518 units, with multiples falling 10.8% to 118,694 and detached homes decreasing by 8.9% to 59,824. Rural starts are estimated at 16,145 units.