Both the Calgary and Edmonton regions experienced a significant annual gain in the number of multi-family housing starts in June, according to a report released Tuesday by Canada Mortgage and Housing Corp.
But the single-detached market struggled.
In the Calgary census metropolitan area, single-detached starts of 310 were down 14 per cent from a year ago but the “all others” category rose by 13 per cent to 801 units.
In the Edmonton census metropolitan area, single-detached starts dropped by two per cent year over year to 467 but “all others” soared by 117 per cent to 838 units.
“Housing starts in Edmonton CMA trended higher in June, with single-detached starts declining slightly while multi-units starts doubled compared to the same month last year. With a high level of unsold inventory, the year-to-date starts saw a decline compared to the same period last year, as builders shift focus from starting new projects to completing existing ones while the economy continues to recover from the economic downturn,” said the CMHC.
Nationally, the trend in housing starts was 205,838 units in June 2019, compared to 200,530 units in May. The trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
“The national trend in housing starts increased in June, primarily due to higher trending row and apartment starts, in urban areas,” said Bob Dugan, CMHC’s chief economist. “The strong surge in the SAAR of apartment starts in April is also contributing to the high level of the trend measure of total housing starts in June.”
CMHC said uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market.
The federal agency said the standalone monthly SAAR of housing starts for all areas in Canada was 245,657 units in June, up 26 per cent from 196,809 units in May. The SAAR of urban starts increased by 26 per cent in June to 234,238 units. Multiple urban starts increased by 31 per cent to 185,804 units in June while single-detached urban starts increased by eight per cent to 48,434 units.
“Canadian housing starts blew past expectations, further making up for what was a weak first quarter of 2019. Starts clocked in at a pace of 246,000 in June, well ahead of even our bullish call,” said Royce Mendes, an economist with CIBC, in a commentary note.
“That said, much of the strength came from the always-volatile multi-unit component meaning there could be normalization in the next month, though single-family homebuilding did also accelerate in June. The recent pickup has taken the average monthly pace above 220,000 for the current quarter, after dipping below 200,000 in quarter one. Today’s print adds further evidence that residential investment will show up as a positive contributor to GDP growth for the first time since 2017. Looking ahead, though, many of the prior headwinds to the housing sector remain in place, and will likely see the strength seen in quarter two taper off as the year progresses.”