CMHC reports annual pace of housing starts slowed in March

The Canada Mortgage and Housing Corporation (CMHC) announced a 7% decrease in the annual pace of housing starts for March 2024, with the seasonally adjusted annual rate falling to 242,195 units from 260,047 in February.

The six-month trend in housing starts also declined by 1.6%, dropping from 247,971 units in February to 243,957 in March. This trend measure provides a clearer picture of upcoming new housing supply by smoothing out monthly fluctuations.

Despite the month-over-month decline, the actual number of housing starts in urban centres with populations over 10,000 increased by 16% year-over-year, reaching 17,052 units in March compared to 14,756 units in March 2023. This growth was driven by a 19% rise in multi-unit starts and a 2% increase in single-detached starts.

Regionally, Vancouver experienced a 27% increase in total housing starts, primarily due to a surge in multi-unit projects. In contrast, Toronto and Montreal saw declines of 26% and 5%, respectively, attributed to decreases in multi-unit starts.

The decrease in housing starts aligns with a broader slowdown in building permits, which dropped by 11.7% in March to a seasonally adjusted $10.53 billion. This decline suggests that higher interest rates are impacting new construction activities.

CMHC uses the trend measure alongside the monthly SAAR to account for significant swings in monthly estimates, providing a more stable view of housing market conditions. The agency continues to monitor these trends to assess the impact on Canada's housing supply.