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CMHC says annual pace of housing starts in May up 10% from April

Writer's picture: Carla LouisseCarla Louisse


The Canadian Mortgage and Housing Corporation (CMHC) reported a positive development in the housing market with a 10% increase in the annual pace of housing starts in May compared to April. This boost comes despite the recent softening of the real estate market, where sales and prices of existing homes have declined and listings have risen. The increase in housing starts is a hopeful sign for the market, indicating a potential uptick in construction activity and housing availability.


According to the Canadian Real Estate Association (CREA), May saw a decrease in the number of homes sold, down 5.9% from the same month last year and 0.6% from April, when adjusted for seasonal variations. The national average home price in May was $699,117, which is a 4% drop compared to May 2023 but a 1% increase from April. Despite these declines, the housing market might see a shift following the Bank of Canada's decision to cut interest rates for the first time in four years.


Shaun Cathcart, CREA's senior economist, noted that May was a slow month for housing activity but suggested that this trend might be short-lived due to the recent interest rate cut. The CREA's benchmark price, which tracks typical home values, was down 2.4% from last year and 0.2% from April, seasonally adjusted. However, new residential listings increased by 13.5% from last year and by 0.5% from April, indicating more properties entering the market.


The regional housing market showed significant variations, with Greater Vancouver and Greater Toronto experiencing sales declines of 19.8% and 22.2%, respectively, compared to a year ago. In contrast, Edmonton and Winnipeg saw sales increases of 19.7% and 14%, respectively. TD economist Rishi Sondhi predicts a stronger market performance in June, driven by the recent interest rate cut and lower bond yields, suggesting further rate relief could lead to a more robust housing market in the latter half of 2024.


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