“In May, the trend in housing starts was virtually unchanged for the third consecutive month. This is in line with CMHC’s analysis indicating that the new home construction market in Canada is headed for a soft landing in 2014,” Bruno Duhamel, CMHC’s manager of housing and economic analysis, said in a press release.
“Builders are expected to continue to manage their starts activity in order to ensure that demand from buyers seeking new units is first channeled toward unsold completed units or unsold units that are currently under construction, including condominium units.”
SAAR takes into account seasonal factors that could affect month-to-month comparisons. This year, poor weather and an exceptionally long winter negatively impacted the housing market as a whole, leading to a near five-year low of 157,500 starts set in March.
Actual starts sank 2.6 per cent year over year, due to weak rural starts and a slight drop in single detached urban starts.
Still, The Canadian Press reported that many economists believe that the market can’t sustain this improved pace. However, CP reporter Julian Beltrame wrote, “…by most indicators – from prices, to affordability, to home ownership rates to household debt – the sector appears to be at the top of its cycle.”
Canadian housing starts hit a seven-month high in May, increasing 0.8 per cent over April to a seasonally adjusted annual rate (SAAR) of 198,324 starts, according to Canada Mortgage and Housing Corp (CMHC).