Growth buoyed by rise in multi-unit starts
Canada Mortgage and Housing Corporation (CMHC) has reported an increase in the pace of home construction across the country.
According to new data from the federal crown corporation, housing starts in February were up 14% from the month earlier, reaching 253,468 on a seasonally adjusted annual rate.
The February total also marks an 11% increase compared to the same period last year, largely propelled by a 16% rise in the construction of multi-unit buildings. Conversely, the construction of single-detached homes saw a 14% decline.
Bob Dugan, CMHC’s chief economist, said the national housing shortage has pushed developers to concentrate on multi-unit projects in Canada’s major urban areas.
Additional data revealed that adjusted starts in February soared by 79% in Vancouver but dipped by 31% in Montreal.
Since housing starts can vary greatly month over month, CMHC also calculated the six-month moving average of the seasonally adjusted annual rate.
February’s moving average was 245,665, up 0.4% from January. But this pace remains below the six-month trend of over 277,000 starts observed in late 2022.
Commenting on CMHC’s release, TD economist Rishi Sondhi said housing starts in the first quarter are expected to fall short of the figures recorded in the fourth quarter of 2023.
“In the first two months of Q1, housing starts are below their fourth quarter level, suggesting some potential downward pressure on residential investment growth in the first quarter,” said Sondhi. “We think they’ll head lower as the year progresses, with past weakness in home sales filtering through into home building.”
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