Canada Housing March 2018

Canada

Canada: Housing starts dip in March on weaker multi-unit urban starts; six-month trend ticks up

April 10, 2018

Housing starts on a seasonally-adjusted annualized (SAAR) basis jumped to 225,200 units in March, according to the Canada Mortgage and Housing Corporation (CMHC). Despite slowing from February’s revised 231,000 units (previously reported: +229,700 units), March’s reading marked ten consecutive months of housing starts above the symbolic 200,000-unit threshold and came in above analysts’ expectations of a sharper slowdown to 218,000 units.

March’s reading reflected a decline in multi-unit urban starts, most visibly in Ontario where new mortgage-lending rules have chilled the once-hot market; and an offsetting increase in single-detached urban starts. A breakdown by city showed that Toronto recorded a sharp drop in multi-unit groundbreaking, as did Montreal. On the other hand, Vancouver posted huge gains, ending the quarter on a strong note and confirming that last year’s legislative measures to cool the runaway market—including the introduction of a foreign homebuyer’s tax—only slowed demand temporarily while buyers priced in the additional costs.

Moreover, the six-month moving average of housing starts (SAAR) ticked higher in March to its highest level in just over a decade, increasing from a revised 225,800 units (previously reported: +225,300 units) to 226,800 units.

A separate report, released by Statistics Canada, showed that the value of Canadian building permits fell in February—the most recent month for which data is available. February’s 2.6% fall in building permits from January was due largely to trimmed-down building plans in Ontario, and especially in Toronto.

In its annual Housing Market Outlook, released last October, the CMHC projected housing starts would range between 192,200–203,000 units this year and between 192,300–203,800 units in 2019. FocusEconomics Consensus Forecast participants expect 204,900 housing starts in 2018. For 2019, the panel sees housing starts moderating to 192,900 units.


Author:, Economist

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Canada Housing Starts March 2018

Note: Monthly housing starts and six-month trend in monthly housing starts, both at seasonally-adjusted annualized rate.
Source: Canada Mortgage and Housing Corporation (CMHC).


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