RSSCanada’s Housing Starts Average 229,000 Units through April
According to data just released by Canada Mortgage and Housing Corporation (CMHC), housing starts through April of this year have averaged 229,000 units on a seasonally adjusted annualized basis. The swing through the first four months has been from a high of 244,000 units in February to a low of 214,000 units in the latest month. February’s figure has been revised downward from an earlier estimate of 256,000 units.
Unit starts in each of the past three months have been revised downward by about 12,000 units. Through March 2008, and prior to the revisions, starts had been +9.0% versus the same period in 2007. Now, through April (and including the revisions), they are only +2.1% ahead of last year, with further easing expected in the months ahead. The numbers are starting to appear more realistic. The very high levels achieved earlier this year were due to construction-start delays on condominium sales made last year.
CanaData’s latest forecast of total Canadian housing starts in full-year 2008 is 210,000 units. According to CMHC, the official level reached in 2007 was 228,000 units and the annual figure has been above 200,000 units from 2002 (inclusive) to the present.
For urban centers, with populations of 10,000-plus, the story has been one of single-family weakness (-15%) and multiple-unit strength (+29%) from January to April, based on actual unit starts. The single-family weakness has been most apparent in Alberta (-48%), followed by Québec (-14%). The multiple-unit strength is most obvious in Ontario (+64%), followed by British Columbia (+21%).
The economic storm clouds hovering over the United States have reduced home buyer confidence. Worries about the jobs outlook have grown. Other factors slowing starts have been the home price run-ups in some major markets over the last several years. Also, there is generalized buyer fatigue after such a long period of exceptional demand. At the same time, interest rates have been relaxed and this will prod some potential buyers into taking the fateful step that is a new home purchase.
Among the nation’s six most populated cities, Toronto (+48%) has been the leader so far this year. All the strength in Toronto has come from multiples (+83%), while singles have been flat (0.0%). Ottawa-Gatineau is next (+41%), with more activity in multiples (+68%) than in singles (+8%). Third place belongs to Calgary (+39%), where multiples (+162%) are skyrocketing and singles (-44%) are languishing.
Vancouver (+16%) has recorded a good level of starts, led by multiples (+22%). Single-family starts (-6%) in the city have fallen back slightly this year versus last year. Montréal is a little ahead of last year, again with more strength in multiples (+25%) than singles (-15%). Finally, Edmonton is the shocker. That city’s total starts (-41%) have nosedived, with singles (-68%) being particularly depressed, but multiples are also in the doldrums (-13%).
Alex Carrick
Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.
