Housing Starts Up in Canada for May Thanks to Condo Surge

June 09, 2015

May was a busy month for condo constructors in Canada. According to a report released by the Canadian Mortgage and Housing Corporation, the monthly seasonally adjusted annual rate (SAAR) of multi-unit urban housing starts increased 16.9 per cent from April to May. Builders began working on 126,367 units last month in comparison to 108,070 units in April. Furthermore, the CMHC said the monthly SAAR of all new housing starts was up from 183,329 units in April to 201,705 units in May. That is the highest level the CMHC has seen for housing starts since July of 2014.

“The small increase in the trend was primarily driven by higher multiple starts in Ontario, the Atlantic region, and Quebec,” said Bob Dugan, CMHC’s Chief Economist.

Out of the three areas mentioned, Ontario experienced the highest number of housing starts. Constructors started working on 81,535 units in May compared to 61,666 in April. 9,584 units were recorded in the Atlantic region last month while only 3,806 units were logged in April, and Quebec experienced 29,448 new housing starts in May, up from 23,567 units in April. Numbers decreased in British Columbia and the Prairies.

Preliminary Housing Start Data May 2015
	April 2015	May 2015
Trend, all areas	179,524	181,231
SAAR, all areas	183,329	201,705
SAAR, rural areas	16,222	16,470
SAAR, urban centres	____________	____________
Single-detached	59,037	58,868
Multiples	108,070	126,367
Total	167,107	185,235
Atlantic, urban centres	3,806	9,584
Quebec, urban centres	23,567	29,448
Ontario, urban centres	61,666	81,535
Prairies, urban centres	40,932	39,599
British Columbia, urban centres	37,136	25,069

Source: CMHC

Single-detached urban starts remained relatively stagnant last month. The construction of 58,868 units began in May, a slight decrease from the 59,037 units recorded in April.

Housing starts are considered to be a good economic indicator as they can roughly measure confidence in the economy. Condos will only be constructed if builders are sure they’ll be able to sell them to confident buyers.

“CMHC also forecasts slight moderation in housing starts in 2015 and 2016, reflecting a slowdown in housing market activity in oil-producing provinces that will partly be offset by increased activity in provinces that are seeing the positive impacts of low oil prices,” stated Dugan.

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