Data out Tuesday from Canada Mortgage and Housing Corp. shows an interesting difference in housing starts between the Calgary and the Edmonton regions.
The federal agency reported that the Calgary census metropolitan area had 337 single-detached starts in August, which was down 16 per cent from a year ago. The “all others” category, which includes condos, rose by three per cent year over year to 714 starts.
However, in the Edmonton census metropolitan area single-detached starts were up six per cent from a year ago to 440 units. The “all others” sector dropped by 16 per cent to 812.
“Total housing starts in the Calgary CMA declined in August 2019 compared to the same month last year as an increase in multi-family construction was offset by a decline in single-detached units. Construction activity continues to slow, as year-to-date housing starts remain lower than last year’s levels in both the single-detached and multi-family segments of the market. The relatively slow pace of economic recovery and elevated inventories have caused builders to slow down production,” said the CMHC.
Across Alberta, single-detached starts were down four per cent to 971 and all other starts fell by 10 per cent to 1,608.
CMHC said housing starts nationally hit 218,998 units in August compared to 208,931 units in July. This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
The CMHC says it uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations, analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.
“The national trend in housing starts increased in August,” said Bob Dugan, CMHC’s chief economist, in a news release. “Higher trending single-detached starts in urban centres in July and August following roughly a year of declines combined with higher-trending multi-family units in August to push the total starts trend to its highest level since June 2018.”
CMHC said the standalone monthly SAAR of housing starts for all areas in Canada was 226,639 units in August, up 1.9 per cent from 222,467 units in July. The SAAR of urban starts increased by 2.0 per cent in August to 213,663 units. Multiple urban starts decreased by 1.4 per cent to 160,388 units in August while single-detached urban starts increased by 13.6 per cent to 53,275 units.
Rural starts were estimated at a seasonally adjusted annual rate of 12,976 units, it added.
“Canada’s housing sector isn’t the growth engine it once was, but neither is it fading off the radar screen in terms of the level of activity. August’s 227,000 pace for housing starts was marginally higher than the prior month, but remains in the upper half of the range seen in the last five years. But more importantly, the August tally was led by a solid gain in single family home building, taking that series to its best month in just over a year,” said Avery Shenfeld, an economist with CIBC in a commentary note. “As a result, while starts in the third quarter are running only a bit above quarter two levels, the gains in singles starts should entail some growth in the GDP contribution from home building, given their higher average cost per unit.”