However, the actual housing starts reading for the whole of 2023 tells a different story
The monthly seasonally adjusted annual rate of housing starts grew by 18% to reach 249,255 units in December, bolstered by an increase in multi-unit urban starts in Vancouver and Montreal, according to Canada Mortgage and Housing Corporation (CMHC).
However, actual 2023 housing starts were down by 7% in Canadian markets with populations of 10,000 people and higher, clocking in at 223,513 units (versus the 240,590 reading in 2022).
“This decline is primarily explained by a 25% decline in single-detached starts in 2023,” CMHC said.
Toronto and Vancouver were the bright spots, with actual 2023 housing starts in these markets being 5% and 28% higher on an annual basis, respectively. On the other hand, Montreal starts were 37% lower due to significant drops in both single-detached and multi-unit starts in 2023.
With a projected shortage by 2024, RE/MAX Canada President Christopher Alexander urges the government to incentivize new home construction.
— Canadian Mortgage Professional Magazine (@CMPmagazine) December 6, 2023
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“Following record and near-record highs in 2021 and 2022, housing starts dipped in 2023, but still significantly outperformed expectations for the year,” said Bob Dugan, chief economist at CMHC. “The decline was driven mainly by a sharp drop-off in single-detached starts and tighter economic conditions affecting multi-unit starts in the year’s final quarter.
The six-month trend in housing starts veered lower in December at 249,898 units, falling by 2.1% from 255,198 units in November.
“The recent monthly multi-unit volatility is not surprising as we’re now starting to see 2023’s challenging borrowing conditions and labour shortages in the housing starts numbers and we expect to see continued downward pressure in the coming months,” Dugan said.
