Canada Housing April 2019

Canada

Canada: Housing starts jump in April

May 8, 2019

Housing starts on a seasonally-adjusted (SAAR) basis surged to 235,460 units in April, according to the Canada Mortgage and Housing Corporation (CMHC). April’s reading was up from a downwardly revised 191,981-unit print in March (previously reported: 192,527), driven by an increase in both multiple and single-detached urban starts. The reading surpassed analysts’ expectations of 196,400 units.

Meanwhile, the six-month average of housing starts on a SAAR basis climbed to 206,103 in April from 202,420 units in March.

Providing a short-term outlook on Canada’s housing starts, Rishi Sondhi, an economist at TD Economics, noted:

“It's early days, but April’s increase in homebuilding bodes well for residential investment and overall economic growth in Q2. These positives aside, on a trend basis, home building has slowed from last year’s robust pace. This is consistent with our forecast calling for starts to cool in 2019. Still, the level should remain healthy, buoyed by ultra-strong population growth, solid labour markets, past gains in pre-construction sales and low rental vacancy rates in large urban markets. The recent drop in borrowing costs will also provide support, although with a lag.”

In its annual Housing Market Outlook released in October, the CMHC projected housing starts would range between 193,700–204,500 units in 2019 and between 189,300–201,300 units in 2020. FocusEconomics Consensus Forecast participants, meanwhile, expect 196,900 housing starts in 2019, before moderating to 191,400 units in 2020.


Author:, Economist

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Canada Housing Starts April 2019

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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