Canadian housing starts ripped higher last month, but that’s only part of the story. Canada Mortgage and Housing Corporation (CMHC) numbers show a surge in new home construction starts in April. Despite April’s surge in activity, new home starts are significantly behind last year.
Canadian Real Estate Starts Spike In April, But Still Lag
Canadian new home starts are up year-over-year, but not year-to-date (YTD). New home starts reached 18,096 homes in April, a 13% increase compared to the same month last year. In 2019, 53,668 new homes started construction so far, down 8% compared to last year. The strength (and weakness YTD) is due to 2 of the largest markets – Toronto and Vancouver.
Canadian New Housing Starts
The number of new homes which have begun construction per month, across Canada.
Source: CMHC, Better Dwelling.
Toronto New Housing Starts Surged 46% Last Month
Toronto experienced the same higher on the month, lower on the year trend – to the extreme. Starts reached 3,154 in April, up 46% compared to last year. In 2019 however, the city has only seen 10,545 starts, down 24% compared to last year. Weak absorption of presale condo apartments may put a drag on future Toronto starts.
Toronto New Housing Starts
The number of new homes which have begun construction per month, across the City of Toronto.
Source: Statistics Canada, Better Dwelling.
Vancouver New Housing Starts Also Increase 46%
Canada’s second largest market for new homes also saw a boom in April, but is still behind last year. Starts hit 2,872 new homes in April, up 46% compared to last year. In 2019, the city fell slightly behind with 8,644 new home starts, down 2%. Vancouver is experiencing a similar trend with weak new home presales. This may drag future home starts even further.
Vancouver New Housing Starts
The number of new homes which have begun construction per month, across the City of Vancouver.
Source: Statistics Canada, Better Dwelling.
Housing construction is up year-over-year, which is generally a strong economic indicator. Don’t get overly excited though, the number of starts are still behind last year. Weak presale absorption in the largest markets, also mean a trend of fewer starts could stick.
Like this post? Like us on Facebook for the next one in your feed.
Aren’t falling housing starts good for prices (as in they go higher?)
No, the number of units built are dependent on absorption and project cost effectiveness. As labor fills out ruinous profit, the incentive is lowered. There’s a good post in the forum on building activity and monetary excess, check it out.
Weakness from the CRA crackdown on people that thought condo flipping was a tax free venture. Try getting mom and pop to speculate on condo assignments after they had to find the money to pay back taxes.