The number of housing starts in both the Calgary and Edmonton regions were on the decline in December, according to data released Wednesday by Canada Mortgage and Housing Corporation.
The federal agency reported that single-detached starts of 223 in December in the Calgary census metropolitan area dropped by 36 per cent compared with a year ago while the 332 single-detached starts in the Edmonton census metropolitan area was down by 19 per cent year-over-year.
There were 307 housing starts in the Calgary region in the “all others” category which reflects apartments, duplexes, and townhomes which was an eight per cent decline from a year ago. In the Edmonton region, that category had 306 starts in December which was the same as last year.
The trend in housing starts nationally was 206,981 units in December, compared to 212,338 units in November. The trend measure is a six-month moving average of the monthly seasonally adjusted annual rates of housing starts.
“The national trend in housing starts decreased in December, the fifth decline in the last six months,” said Bob Dugan, CMHC’s chief economist. “Reflecting these recent declines, total annual housing starts in 2018 were lower than in 2017, as lower single-detached starts more than offset a slight increase in multi-family starts this year. Nonetheless, total housing starts remain elevated when compared to historical averages.”
Robert Kavcic, Senior Economist with BMO Capital Markets, said 2018 was a solid year for Canadian residential construction.
“While we suspect that we’ve probably seen cycle highs for activity, job market and demographic fundamentals should still lend support this year — we’re currently calling for 205k starts in 2019,” he said.
Rishi Sondhi, Economist with TD Economics, said homebuilding in Canada is being buoyed by strong population growth, on-going job gains, and past growth in pre-construction sales.
“We expect homebuilding to glide below the 200k mark in 2019 as higher mortgage rates, tighter lending conditions and strained affordability in key markets weighs on demand,” said Sondhi. “Overbuilt markets in the Prairies and moderating pre-construction sales activity are also factors which should cool the pace of new housing construction moving forward. On the supportive side, a rising population coupled with continued – albeit slower – economic growth should ensure that the moderation remains orderly.”
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
