Housing Starts Unchanged in January, CMHC Reports
Total actual housing starts were essentially flat in January 2023 when compared to the same month last year, although they fell on a seasonally adjusted annual basis, according to the latest figures from Canada Mortgage & Housing Corporation (CMHC). They also fell according to its trend measure.
The federal housing agency reported the standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada declined 13% in January (215,365 units) compared to December (248,296 units).
The SAAR of total urban starts declined 16% with 191,491 units recorded in January. Multi-unit urban starts declined 20% to 146,267 units while single-detached urban starts increased 3% to 45,224 units.
The rural starts SAAR estimate was 23,874 units.
The trend in housing starts was 259,412 units in January, down 4% from 269,781 units in December. The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada.
“Both the monthly SAAR and the six-month trend of housing starts declined nationally in the first month of 2023, with SAAR of housing starts hitting its lowest level since September 2020. Among Toronto, Montreal and Vancouver, Montreal was the only market with increases in total SAAR housing starts in January, up 36%. Toronto declined 52% while Vancouver declined 14%, which contributed to the overall monthly decline in SAAR housing starts for Canada,” CMHC deputy chief economist Aled ab Iorwerth said in a statement.
Actual starts of single-family homes in urban areas – which CMHC defines as a town or city with a population greater than 10,000 – was set at a preliminary 2,405 units. That’s 20% lower than the 3,003 units started in January 2022.
The decline was felt in every region of the country, ranging from a 39% drop in Quebec to a slight 2% decline in the Prairies.
Meanwhile, multi-unit segments starts – which include everything from apartments to townhouses and other linked dwellings – were tagged at a preliminary 10,984 units, a 6% gain over the 10,385 units started in the same month a year ago.
Driving the upswing was a 57% jump in starts in Ontario, helped by a 47% advance in British Columbia. These were offset by 60% declines in Atlantic Canada and 46% in Quebec.
The declines in single-family starts and the gains in the multi-unit segment cancelled each other out, bringing total housing starts to an actual and preliminary 13,389 units in January, essentially unchanged from the 13,388 units begun in the same month last year.
In her research note, which addressed CMHC’s seasonally adjusted figures, Rishi Sondhi of TD Economics said, “January’s level of starts was well below expectations, the decline was broad-based and came despite some indications of warmer weather during the month.
“Zooming out, while January’s decline was concentrated in multi-family units, single-family starts have been weaker on a trend basis over the past few months. This may indicate that last year’s outsized weakness in single-detached sales is bleeding over into homebuilding activity,” she continued, adding, “All of that said, we would expect some bounce back in February after last month’s outsized drop.”
Sondhi also noted it’s unclear whether the government’s recently imposed foreign buying ban had any immediate impact on building activity in January, although her organization anticipates housing starts will trend lower in 2023 as consumer demand dampens in light of economic pressures.