CMHC’s forecast a stretch on higher January starts

by Olivia D'Orazio on 09 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?

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