As the clock struck midnight on the dawn of 2024, the Canadian housing market witnessed a subtle shift in tempo, with the annual pace of housing starts in January slowing by 10% compared to the bustling December scene. According to the latest data from the Canada Mortgage and Housing Corp. (CMHC), the seasonally adjusted annual rate of housing starts dipped to 223,589 units, down from the spirited 248,968 units recorded just a month prior.
TD Bank economist Marc Ercolao shed light on this deceleration, noting that January saw housing starts ease back following a robust rebound in December. While the level of homebuilding remains elevated relative to historical norms, Ercolao believes that near-term starts are likely to remain subdued despite the recent vigor in home sales.
The urban landscape mirrored this overall decline, with the annual pace of urban housing starts slipping by 11% to 208,119 units. Multi-unit urban starts experienced a steeper downturn, dropping by 14% to 164,789 units, while single-detached urban starts saw a marginal increase of 0.08% to 43,330 units.
Regional disparities painted a varied picture across the country. Toronto stole the spotlight with a staggering 179% surge in its annual rate of housing starts, fueled by a surge in multi-unit projects. However, Montreal and Vancouver faced setbacks, with housing starts plunging by 28% and 55%, respectively, primarily due to declines in multi-unit projects.
In Ontario, the Kitchener-Cambridge-Waterloo region witnessed a sharp decline of 88%, while Ottawa saw a 64% dip. Edmonton experienced a 53% decrease in housing starts, contrasting with Calgary’s notable 39% rise compared to December.
The rural landscape saw a more modest annual rate of 15,470 starts, reflecting a nuanced picture of housing activity outside urban hubs.
CMHC Chief Economist Bob Dugan highlighted the broader trends, noting a 13% year-over-year increase in actual housing starts across Canadian urban centers in January. Toronto led the charge with a remarkable 49% surge, while Vancouver faced a 44% downturn and Montreal registered a modest 6% decline.
Dugan emphasized the historical significance of January’s performance, marking it as the second-highest number of housing starts for the month since 1990.
Despite this nuanced backdrop, the six-month moving average of the monthly seasonally adjusted annual rates of housing starts in January stood at 244,827 units, marking a marginal 2% decline from December 2023.
As the housing market navigates through the ebbs and flows of economic dynamics, January’s report serves as a compass guiding stakeholders through the evolving landscape of Canadian real estate in the new year.
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