Toronto housing starts surged in January but fell in Vancouver, Montreal

The annual pace of housing starts in January slowed by 10 per cent compared with December, as the rate of starts for new multi-unit projects such as apartments, condominiums and townhouses pulled back.

Canada Mortgage and Housing Corp. said Thursday the seasonally adjusted annual rate of housing starts came in at 223,589 units for the first month of the year compared with 248,968 for December 2023.

TD Bank economist Marc Ercolao said the beginning of 2024 saw housing starts pare back some of their recent strength after a strong rebound in December.

“The level of homebuilding is still elevated relative to historical norms, but today’s print supports our view that near-term starts will remain subdued in spite of the recent strength in home sales,” Ercolao wrote in a report.

The decrease came as the annual pace of urban housing starts fell 11 per cent to 208,119 units, with the rate of multi-unit urban starts down 14 per cent at 164,789 units and single-detached urban starts up 0.08 per cent at 43,330 units.

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The annual rate of housing starts in Toronto was up 179 per cent, boosted by an increase in multi-unit starts, but Montreal fell 28 per cent and Vancouver dropped 55 per cent due to drops in multi-unit starts.

The Kitchener-Cambridge-Waterloo region in Ontario also saw a drop of 88 per cent, while Ottawa declined 64 per cent. Edmonton saw a 53 per cent drop in housing starts, but the annual rate in Calgary rose 39 per cent compared with December.

The annual rate of rural starts was estimated at 15,470.

CMHC noted that the actual number of housing starts across Canada in urban centres was up 13 per cent at 14,878 units in January compared with 13,220 in January 2023.

The agency said actual housing starts were 49 per cent higher year-over-year in Toronto, but down 44 per cent in Vancouver and six per cent lower in Montreal.

“In fact, from a historical perspective, we observed the second highest number of housing starts for the month of January going back to 1990,” CMHC chief economist Bob Dugan said in a statement.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts in January was 244,827,  down two per cent from 249,757 units in December 2023.