Multi-family assets helped buoy Vancouver, Montreal markets
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Weaker activity in the single-family market had a marked effect upon new home construction nationwide in May, which ended up at 201,983 units – significantly down from April’s 205,717 starts.
“The national trend in housing starts decreased in May as a result of continuing decline in the trend for single starts as well as a decline in the trend of multi-unit starts that follows gains in this segment in recent months, in urban areas,” CMHC chief economist Bob Dugan said.
“The decrease in the trend of multi-unit starts reflects a decline in the SAAR level of multi-unit activity in May from the unusually elevated level registered in April, which leaves multi-unit SAAR starts closer to its 10-year average.”
This was most apparent in Vancouver, as multi-family units represented approximately 90% of the market’s total starts last month. New construction volume for non-single-detached housing had a massive 75% increase year-over-year.
“Two thirds of the new units were located in Burnaby, Surrey, and Coquitlam, which together saw a number of condominium and rental apartment projects get underway,” CMHC stated in its latest data release.
Montreal also enjoyed a considerable 30% annual gain on multi-family starts, which the CMHC stated was “solely attributable to rental housing construction, as condominium and single-family home starts recorded decreases.
“The low vacancy rates on the conventional rental market and the greater proportion of young households now opting for rental housing have kept stimulating rental housing starts.”
On the other hand, Toronto suffered a 16% decline in overall starts in May. Non-single-detached housing construction activity grew by a relatively meek 10% annually.
“High homeownership costs continue to weigh on the demand for single-detached and row houses thus resulting in fewer low-rise home starts. Strong pre-construction sales of condominium apartment units over the past two years will continue to translate into starts over time at a varied pace, despite their starts trending lower in May.”
