Canada: Housing starts resilient in April
May 8, 2020
Housing starts—excluding the province of Quebec due to the pandemic—increased to 166,415 units on a seasonally-adjusted annualized rate (SAAR) basis in April, according to the Canada Mortgage and Housing Corporation (CMHC), up from March’s 149,923-unit reading when excluding Quebec (March including Quebec: 195,420 units). April’s increase was driven by a sharp rise in starts of multi-units in urban areas, while urban single-detached housing starts tapered notably.
Meanwhile, the six-month average of housing starts in urban areas excluding Quebec on a SAAR basis increased from 145,081 units in March to 147,532 units in April. That being said, the national six-month average of housing starts on a SAAR basis decreased to 198,7812 units in April from 204,899 units the month prior—due to Quebec falling out of the survey in April. Commenting on April’s surprisingly strong reading, Katherine Judge, an economist at CIBC, noted:
“Although some social distancing measures have started to be relaxed, the outlook for homebuilding continues to look strained given the high unemployment rate and an environment of low confidence, suggesting that housing activity will recover only gradually as restrictions are lifted. Moreover, population growth from international migrants as a source of demand for housing is clearly on hold right now given travel restrictions, and based on what was seen in past recessions, demand from new non-permanent residents will remain limited even as activity resumes.”
Author: Steven Burke, Economist