“Housing starts trended down across the country
with the exception of Ontario,” said Bob Dugan, CMHC Chief Economist. “The overall decline is mostly attributable to a slowdown in the Prairies where the housing starts trend was at a 4-year low in January. The slowdown in new housing activity coincides with an unemployment rate that is at a 5-year high in Alberta”.
Overbuilding – especially in markets such as Montreal and Calgary – have caused issues in various markets. The CMHC said in late January that Calgary’s market shows “strong” evidence of problems, one of which being overbuilding.
However, there is now evidence that the construction boom could be winding down. Overbuilding causes many issues and oversupply often drives down home prices – which can be an issue for investors.
“The standalone monthly SAAR was 165,861 units in January, down from 172,533 units in December. The SAAR of urban starts decreased by 3.0 per cent in January to 153,701 units,” CMHC said in a realease. “Multiple urban starts decreased by 5.3 per cent to 95,406 units in January and the single-detached urban starts increased by 1.0 per cent to 58,295 units.”
The seasonally adjusted annual urban starts fell in British Columbia, the Prairies, and Quebec.
However, starts increased in Ontario and Atlantic Canada.
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Canada Mortgage Housing Agency’s measure of housing starts in Canada was 199,169 units in January compared to 203,304 in December.