Lower housing starts to temper inventory

by Jennifer Paterson09 Mar 2015
Housing starts in Canada were down for the fifth consecutive month in February, according to the latest figures by CMHC.

This reflects a decreasing trend in multiple starts, said Bob Dugan, chief economist at CMHC's Market Analysis Centre.

“The declining trend in multiple starts is helping to gradually erode the inventory of completed and unsold units, which is high compared to historical levels,” he added.

Housing starts in February were 182,137, compared to 188,761 in January.

The standalone monthly seasonally adjusted annual rates (SAAR) was 156,276 units in February, down from 187,025 units in January.

The SAAR of urban starts decreased to 140,722 in February, from 171,950 in January, reflecting broad-based declines in the majority of the provinces.

In regions where construction ran rampant for months, news of fewer starts means agents will likely have less inventory to fill. Toronto, which is frequently criticized for its supposed overbuilding of condo towers, recorded fewer starts, mainly on the freezing weather.

“February was the coldest month on record for the GTA and frigid temperatures have pushed back some large condominium projects from getting off the ground,” said Dana Senagama, CMHC’s principal of market analysis for the GTA. “However, more high-rise starts are expected this year due to an increase in pre-construction condominium apartment sales since mid-2013.”

Housing starts for single-family homes were up very slightly on last year in Prince Edward Island and in Manitoba, with more significant increases in British Columbia.

For all other types of housing starts, gains were made in the Prairies compared to the same time last year, including in Alberta and Saskatchewan.

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