The Canadian Press
The annual pace of housing starts in Canada fell 22 per cent in November, Canada Mortgage and Housing Corp. reported Friday. The largest declines were in Toronto and Vancouver where starts plummeted 39 per cent.
The drop came as the annual pace of urban starts fell 23 per cent to 195,363 units, with the rate of multi-unit urban starts down 27 per cent at 151,297. Single-detached urban starts fell seven per cent to 44,066 units.
Monthly seasonally adjusted annual rate of housing starts in November came in at 212,624 units, down from 272,264 in October.
Economist Mike Moffat warns the decline in housing starts is part of a larger economic downward trend that has been seen over the last year.
“If we look from January to November, so the last 11 months, we’re down about eight per cent since 2022. So that’s a really big issue,” he said.
Report highlights:
- The standalone monthly SAAR of total housing starts for all areas in Canada in November was 212,624 units, a decrease of 22% from October.
- The SAAR of total urban starts decreased by 23% in November to 195,363 units.
- Multi-unit urban starts decreased by 27% to 151,297 units in November.
- Single-detached urban starts decreased by 7% to 44,066 units.
- Rural starts were estimated at a seasonally adjusted annual rate of 17,261 units.
“We’re seeing housing starts decline at a time where we have record population growth. So this is going to cause all kinds of tensions where we have more and more people chasing unfortunately fewer homes,” Moffatt said.
Bigger urban centres in particular are struggling. In Montreal, the rate of starts was down 30 per cent, while Toronto and Vancouver both saw a drop of 39 per cent, driven significantly by a reduction in new multi-unit dwellings, according to CMHC.
Moffatt says trends are a reflection of economic struggles and high interest rates.
“A lot of the declines in housing starts have to do with economic conditions, particularly for apartment construction. You need to finance these projects upfront, right? And that’s a huge capital cost and with higher interest rates, a lot of builders and developers are just staying on the sidelines.”
The annual pace of rural starts for November is estimated at 17,261, according to CMHC.
“The CMHC tells us that we need to over double housing starts over the next seven to eight years and we’re not even keeping pace,” Moffatt added. “We’re seeing decreases.”
And as long as the decline continues, “the worse this crisis is going to get.”
“I fear that the situation’s only going to get worse unless those housing starts go up — and go up quickly.”
With files from The Canadian Press