CMHC’s forecast a stretch on higher January starts

by Olivia D'Orazio09 Feb 2015
It could take a little while before the Canada Mortgage and Housing Corp.’s recent predictions of a calmer housing market come to fruition, as the latest starts data shows a slight rise in seasonally adjusted starts.
Seasonally adjusted starts were up 4.3 per cent from December, to 187,276 starts in the month of January, mainly as builders and developers attempt to meet the continued demand for housing, especially for multi-unit properties in Canada’s metropolitan areas.
Urban starts – those in cities with populations larger than 10,000 people – were up 6.4 per cent, month-on-month, at 172,322. Of those, 115,008 were in multi-unit developments.
The CMHC, however, attempted to highlight the six-month moving average, which fell 1.4 per cent month-over-month, to 188,956 starts in January, in an effort to prove its latest forecast.
"The trend in total housing starts has been moderating since September 2014, reflecting lower trends in both multiple and single-detached starts,” said Bob Dugan, CMHC’s chief economist. “Overall, economic and demographic factors remain supportive of housing demand. The moderation in new home construction reflects inventory management by builders and is in line with CMHC’s expectations.”
Last week, the CMHC said it expects a “moderated” market in 2015 and 2016, as falling oil values depress housing starts.
However, seasonally adjusted data – and actual numbers, which showed five per cent more starts in January from the same month a year ago – suggest the markets are still going strong.
The Prairies and Atlantic Canada led the increase in starts – rising 29.5 per cent to 53,326 starts, and 45 per cent to 7,794 starts, respectively – offsetting slight declines in Quebec and British Columbia.
Agents on the ground are also reporting no change to the high-demand, low-supply market.
“Here in southern Ontario, I'm not seeing any affect at the moment related to oil prices,” says Matt Johnson, an agent commenting in the REP forum. “I don't expect to either.”
Have your say: Are you seeing any change to the market – so far – in 2015?


  • by Gurnam Panesar - ReMax 2/9/2015 12:19:11 PM

    I don't see any effect on prices. My client made an offer on a house in Mississauga near square one. 4 offers. SOLD $25,000 more than the asking price, last week.

  • by 2/9/2015 12:45:58 PM

    Oil price will affect housing prices ONLY in Alberta and possible the prairies and Newfoundland. Ontario, BC and Quebec couldn't care less. I wish people would stop associating housing and oil. In fact, lower oil prices are really beneficial for those living in provinces that are not oil dependent. We now have money to spend on something that useful, not just on gas.

  • by Peter B. 2/9/2015 1:11:15 PM

    The issue with oil, although a large one for federal tax revenues, is moderate for just about every other province, at least in regards to economic stability. Yes, Alberta is showing the loss and the Alberta taxpayers may have to pay a bit more out of their pay stub but for the rest of the country, mostly positive. My annual gas (auto) bill nears $3000 at the $1.30 price point so if it stays at $1.00, I save about $1000. That goes back into the economy as most of us simply have more bills than ability to save.
    The main issue is the differences in economy between Alberta (and NFLND) and the rest of the country, except perhaps for the northern territories and Provinces, Canada ongoing weekness has been in the lagging manufacturing areas.
    Jobs are farmed out to other countries (Wrigleys moving from Toronto to U.S., etc.) means less manfucturing and office work and more part-time and commission work. Hence, no benefits to speak of and no guaranties of income.
    This over-supply of workers is leading to a downward pressure on wages and as the banks have shown, by announcing they are cutting back (although still very profitable) BUT will be rehiring (likely at lower wages), the corporations that run and ruin this nation are more than willing to take advantage of the situation. The only reason there is a positive outlook is because most of the world's cheaper jurisdictions just do not have oil as a backup commodity so as oil prices stabilize, the related work environment will as well. If cheap synthetic oil is ever invented, you can pretty well guarantee that THAT work will also make it's way to cheaper jurisdictions and that's when the S*** will really hit the work fan. How many greeters does Wal-Mart need? It's not just about oil.
    As always, please ignore spelling errors.


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