News marks a sluggish start to the year
The annual pace of housing starts in Canada fell by 10% at the beginning of the year compared with December, the national housing agency has said.
New figures released by Canada Mortgage and Housing Corporation (CMHC) on Thursday showed that the seasonally adjusted annual rate of housing starts slipped to 223,589 units in January from 248,968 the month prior.
That trend was driven by a slower pace of urban housing starts, which dropped by 11% to an annual pace of 208,119 units, and multi-unit urban starts, whose pace plunged 14% to 164,789 units.
Still, CMHC noted that construction ticked upwards on an annual basis in January, rising by 13% thanks to stronger year-over-year multi-unit starts.
Montreal and Vancouver saw their annual rates of housing starts slow dramatically in January – falling by 28% and 55% respectively – although Toronto posted a huge increase, with multi-unit starts propelling a 179% jump over December.
Despite a 10% month-to-month drop, housing construction was up 13% year-over-year in January. The increase was driven by multi-unit starts. 🏗️
— CMHC (@CMHC_ca) February 15, 2024
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The news of a sluggish start to the year on the construction front arrives amid reports of plummeting homebuilder confidence, with high interest rates and building costs presenting significant challenges for the construction sector.
The Canadian Home Builders’ Association (CHBA) said its Housing Market Index, released in January, showed 64% of builders built fewer homes because of high interest rates in 2023, with 30% cancelling projects and 36% envisaging fewer starts in 2024 compared to the 12 months prior.
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