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CMHC reports annual pace of housing starts in April down 1% from March



The Canada Mortgage and Housing Corporation (CMHC) announced that the annual pace of housing starts in April saw a slight decrease of one per cent compared to March. The seasonally adjusted annual rate of housing starts was 240,229 units for April, down from 242,267 in March, according to the national housing agency's report on Wednesday.


The minor decline was attributed to a decrease in multi-unit urban starts, which fell by one per cent to 178,462 units. Conversely, single-detached urban starts rose by two per cent, reaching 41,661 units. In urban centres, the overall pace of housing starts remained stable at 220,123 units. Meanwhile, rural starts were estimated at 20,106 units.


CMHC's chief economist, Bob Dugan, noted that the reduction in multi-unit starts, particularly in Ontario, significantly influenced the downward trend. "The multi-unit volatility observed in Toronto, Vancouver, and Montreal in recent months is unsurprising as we continue to see last year's challenging borrowing conditions reflected in multi-unit housing starts numbers," Dugan stated in a press release. He also predicted ongoing downward pressure in these major cities.


Housing starts were notably lower in Toronto, Vancouver, and Montreal due to declines in both multi-unit and single-detached starts. Compared to April 2023, starts were down by 38 per cent in Toronto, 30 per cent in Vancouver, and three per cent in Montreal.


The six-month moving average of the monthly seasonally adjusted annual rate was 238,585 units in April, marking a 2.2 per cent decrease from March's 243,907 units.


Despite the overall decline, TD economist Rishi Sondhi highlighted that housing starts remain at a healthy level. He pointed out that government measures and rising rents are encouraging the construction of purpose-built rental units. However, Sondhi anticipates a continued decline in housing starts for the remainder of the year due to recent weaknesses in pre-sale activity, high construction costs, and elevated interest rates.


In a separate report on Wednesday, The Canadian Real Estate Association revealed that home sales in April increased by 10.1 per cent compared to a year ago, but fell 1.7 per cent from March. An increase in new listings led to a 6.5 per cent rise in the number of properties on the national housing market, the highest inventory levels since before the COVID-19 pandemic.


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