Housing Starts Down 7% in March, But Major Cities Show Growth: CMHC

Housing Starts Down 7% in March, But Major Cities Show Growth: CMHC
April 16, 2024

Canada's housing market continues to show complex dynamics. Here's a breakdown of the latest data from Canada Mortgage and Housing Corporation (CMHC):

Month-to-Month Decline

  • The seasonally adjusted annual rate of housing starts fell 7% in March compared to February (242,195 units vs. 260,047 units).

Year-over-Year Increase in Major Cities

Positive news for large urban areas: actual housing starts rose 16% in March 2024 compared to March 2023 (17,052 units vs. 14,756 units).

  • This increase was driven by a rise in both multi-unit starts (up 19%) and single-detached starts (up 2%).
  • Toronto and Vancouver experienced significant year-over-year gains (10% and 15% respectively) due to a surge in multi-unit starts.
  • Montreal, however, saw a slight dip year-over-year due to lower multi-unit starts.

Economists' Outlook

Despite the month-to-month decline, economists predict a further decrease in housing starts overall. This is attributed to:

  • Recent weakness in pre-sale activity.
  • Tougher borrowing conditions impacting project financing.

Potential Slowdown Factors

  • The six-month moving average of adjusted starts suggests a slight downward trend (1.6% decrease).
  • Economists anticipate potential slowdowns due to:
    • Construction labor shortages.
    • Rising building material costs.
    • Weaker homebuilder sentiment.

The housing market is sending mixed signals. While things are looking up in major cities compared to last year, there might be some bumps ahead due to the broader economic climate. Here at Coldwell Banker Horizon Realty, we'll keep a close eye on the market and continue to update our clients as things unfold.

Source: CMHC

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