Canadian housing starts see record increase in June

Canadian housing starts saw a remarkable turnaround in June, as the declining trend observed over the past months was reversed. According to the Canada Mortgage and Housing Corporation (CMHC), the month witnessed a notable increase in actual housing starts, marking a positive shift in the industry.

The trend measure, which provides a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada, rose to 234,974 units in June, up 2.4 per cent from May’s figure of 229,520 units.

However, the standout highlight came from the SAAR, which demonstrated a 41 per cent month-over-month surge total housing starts for all areas in Canada in June. The figure climbed from 200,018 units in May to an impressive 281,373 units, representing the largest month-to-month SAAR change in the last 10 years. The increase was primarily driven by multi-unit starts, which accounted for 82 per cent of total starts.

Focusing on urban areas, the monthly SAAR of total urban starts experienced a significant increase of 46%, recording 262,815 units in June. Within urban areas, multi-unit starts saw a remarkable 59% jump to reach 219,914 units, while single-detached urban starts rose by 3% to 42,901 units.

Vancouver and Toronto lead the way with substantial gains, while Montreal shows modest growth

Leading the charge were the Vancouver and Toronto areas, both showcasing impressive gains in total SAAR housing starts. Vancouver experienced a 71 per cent increase, while Toronto outperformed with a 100 per cent surge. Together, these two metropolitan areas accounted for 47 per ent of total housing starts across Canada’s urban centers in June. The Montreal CMA also demonstrated growth, albeit more modest at 8.0 per cent. Notably, all three regions witnessed increases in both single-detached and multi-unit starts.

Meanwhile, the rural areas of Canada saw an estimated monthly SAAR of 18,558 units, indicating a relatively stable market.

The high-interest rate environment continues to pose challenges to housing starts

Commenting on the positive shift in housing starts, Bob Dugan, CMHC’s chief economist, says, “We observed a large increase in the SAAR of housing starts in June, which pushed the trend of housing starts upward after consecutive monthly declines since November 2022. Despite this, total year-to-date housing starts for the first half of the year were 8.0 per cent lower than they were over the same period in 2022 as the high interest rate environment continues to challenge housing starts through increasing borrowing costs.”