Canadian Housing Starts Trend Lower in December

The Canada Mortgage and Housing Corporation (CMHC) reported on Tuesday (1-17-23) that standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada declined 5% in December to 248,625 units, compared to November’s 263,022 units. CMHC also reported that the SAAR of total urban starts decreased by 5%, with 227,709 units recorded in December. Multi-unit urban starts declined 4% to 182,850 units, while single-detached urban starts fell 11% to 44,858 units. Rural starts were estimated at a SAAR rate of 20,917 units.

The trend in housing starting was 269,930 units in December, down 1% from 273,801 units in November. The trend measure is a six-month moving average of the monthly SAAR of housing starts. CMHC notes that they use the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtains a clearer picture of upcoming new housing supply. In some situations, analyzing only SAAR data can be misleading, as multi-unit segment largely drive the market and can vary significantly from one month to the next.

Adding additional insight to the December Canadian Housing Start report, CMHC’s Chief Economist Bob Dugan said:

“The 2022 year ended with a slight decline for both the monthly SAAR of housing starts and the trend at the national level in December; however, Toronto, Montreal, and Vancouver all posted increases in total SAAR housing starts, with Toronto posting a significant increase of 72% in December. The rate of new construction continued at an elevated pace in 2022 overall, ending the year with actual total urban starts at 240,590 units (-1%) in Canada, similar to levels observed in 2021 (244,141 units). While these additional units will provide much needed supply on the market, demand for housing in the country will continue to grow. We need to find innovative ways to deliver more housing supply and keep building at a higher pace in the coming years in order to improve affordability.”