Housing starts in Canada in 2023 were down 7% in centres of 10,000 population and over, with 223,513 units recorded, compared to 240,590 in 2022, according to Canada Mortgage and Housing Corporation (CMHC). This decline is primarily explained by a 25% decline in single-detached starts in 2023, it said.
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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. 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 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,” said Bob Dugan, CMHC’s Chief Economist.
Despite the national decline, actual 2023 housing starts were 5% and 28% higher than in 2022 in Toronto and Vancouver, respectively, driven by higher multi-unit starts. Montreal starts were 37% lower due to large declines in both single-detached and multi-unit starts in 2023, said the CMHC.
“The six-month trend in housing starts was also lower in December at 249,898 units, down 2.1% from 255,198 units in November. The trend measure is a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada,” said the report.
“The monthly SAAR of total housing starts for all areas in Canada increased 18% in December (249,255 units) compared to November (210,918 units).”
James Orlando, Senior Economist with TD Economics, said housing starts rebounded nicely after November’s big drop.
“This kept the trend in home building elevated to close the year, supported by condo construction (reflecting past gains in pre-sales) and purpose-built rental units (boosted by skyrocketing rents and government programs),” he said.
“While our view remains that housing starts should trend lower moving forward, as past weakness in home sales flow through to new supply, it is clear that population-fueled demand for homes is keeping builders active. This should support the level of starts through 2024, even with the anticipated downtrend.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
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