Ontario, Quebec and many parts of the Atlantic region continue to offset the effects of low oil prices in Canada as housing starts registered an increase from April to May.
“The small increase in the trend was primarily driven by higher multiple starts in Ontario, the Atlantic region, and Québec. Despite month-to-month variation in multiple starts, CMHC expects builders will continue to focus on managing inventory of completed but unsold units — inventory that is still above historical average," Bob Dugan, CMHC’s Chief Economist.
“(There will be a) slight moderation in housing starts in 2015 and 2016, reflecting a slowdown in housing market activity in oil-producing provinces that will partly be offset by increased activity in provinces that are seeing the positive impacts of low oil prices."
The comments shed light on the complete picture being seen in Canada’s housing market as Central and Eastern provinces continue to enjoy the positive impacts of low interest rates and oil prices while Western provinces are being moderately affected in some markets.
In May, the seasonally adjusted annual rate (SAAR) of urban starts increased in Atlantic Canada, Ontario and Québec, while it decreased in British Columbia and the Prairies. As a result, rural starts were estimated at a seasonally adjusted annual rate of 16,470 units.
The SAAR of starts in urban areas also increased by 10.8 per cent in May to 185,235 units. Multi-unit urban starts increased by 16.9 per cent to 126,367 units in May, while the single-detached urban starts segment essentially held steady at 58,868 units.
The standalone monthly SAAR was 201,705 units in May, up from 183,329 units in April.