Activity in multi-unit housing segment drove June housing starts

Increased activity in the apartment and rowhouse sectors propelled Canadian housing starts last month, according to new data from Canada Mortgage and Housing Corporation.

The six-month trend in housing starts was 205,838 units in June, markedly higher than the 200,530 units in May.

“The national trend in housing starts increased in June, primarily due to higher trending row and apartment starts, in urban areas,” CMHC chief economist Bob Dugan said.

“The strong surge in the SAAR of apartment starts in April is also contributing to the high level of the trend measure of total housing starts in June.”

In Vancouver, economic robustness and population growth pushed year-to-date starts up by around 25%, with a clear majority of multi-unit starts coming from the City of Vancouver and Richmond.

Another highlight was Edmonton, where multi-unit starts doubled annually and single-detached construction fell slightly. “With a high level of unsold inventory, the year-to-date starts saw a decline compared to the same period last year, as builders shift focus from starting new projects to completing existing ones while the economy continues to recover from the economic downturn.”

In Québec City, around 2,600 units have begun construction year-to-date, maintaining starts strength on an annual basis. “Once again this year, activity was supported mainly by the construction of rental housing, which accounted for about two thirds of the dwellings started. This market segment has been stimulated by several factors, including greater demand for apartments due to the aging population.”

In Saskatoon, multi-unit starts helped buoy the market, but “actual starts of all housing types decreased by 16% during the first six months of 2019, compared to the same period in 2018. A number of factors, including higher construction costs and weaker new home demand, have contributed to builders scaling back production of new housing units so far this year.”

Toronto saw its total housing starts remain flat on a monthly basis. Apartment and single-detached homes trended slightly higher, while row and semi-detached starts posted slightly lower trends. “Overall, multi-unit home starts continue to dominate construction so far this year as more homebuyers choose lower priced condominium apartments and row houses over higher priced single-detached homes.”

MBN

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