New housing starts continue slide in September

October 10, 2018

Canadian housing starts fell for the third straight month in September, reaching their lowest level in almost two years, according to Canada Mortgage and Housing Corporation (CMHC).

The seasonally adjusted annual rate (SAAR) of starts across Canada was 188,683 units in September, down from 198,843 in August. The figure also represents a 13.84 per cent decrease from the September 2017 total of 218,982.

The six-month moving average of housing starts throughout Canada was 207,768 units in September, compared to 213,966 units the previous month.

The slowdown in the pace of housing starts comes as more restrictive mortgage rules begin to take hold and Bank of Canada mulls another interest rate rise later this month.

Last month, the SAAR of urban starts decreased by 5.9% to 175,653 units. Multiple-unit urban starts, which includes condos and apartments, decreased by 8.9 per cent to 122,656 units while single-detached urban starts increased by 2 per cent to 52,997 units.

Rural starts were estimated at a seasonally adjusted annual rate of 13,030 units.

British Columbia led the declines with a SAAR year-on-year drop of 31.9 per cent in housing starts as affordability, particularly in the Greater Vancouver area, remained an issue. Compared to September 2017, housing starts in Ontario decreased by just 0.22 per cent, but there were bigger falls in Alberta (23.26 per cent) and Quebec (20.8 per cent).

Bob Dugan, CMHC’s chief economist, said, ”The slowdown in the pace of new residential construction activity in recent months is a result of both lower single-detached and multi-starts activity and brings new residential construction closer to its long run average from the elevated levels registered in 2017.”