Pace of Canadian housing starts topped expectations in May

Canada Mortgage and Housing Corp. says the annual pace of housing starts in May was up eight per cent compared with April.

The national housing agency says the seasonally adjusted annual rate of housing starts in May rose to 287,257 units compared with 265,734 in April.

The drop came as the pace of urban starts rose eight per cent to 264,162 units in May.

CIBC Capital Markets senior economist Andrew Grantham said in a note Wednesday morning that May’s results topped the consensus estimates of 255,000 starts in the month.

The annual rate of urban starts of apartments, condos and other types of multi-unit housing projects gained 13 per cent to come in at 201,193 units for the month, while the pace of single-detached urban starts fell four per cent to 62,969 units.

Rural starts were estimated at a seasonally adjusted annual rate of 23,095 units.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 254,727 units in May, down from 257,833 in April.

TD Bank economist Rishi Sondhi said that housing starts are remaining strong so far through 2022 as the figure is mostly a reflection of past sales.

“However, we look for starts to trend notably lower in 2023, as rising rates and cooling activity weigh on homebuilding,” he wrote in a note on Wednesday.

— with files from Global News’s Craig Lord