Canadian single-detached housing construction in the first half of 2023 dropped by 25% compared to the previous year, resulting in 9,523 fewer units under construction in major metropolitan areas, according to the Canada Mortgage and Housing Corporation (CMHC). This decline is attributed to factors like high-interest rates, limited credit access, and elevated construction and labor costs, which have created challenging conditions for homebuilders nationwide.
The decrease in construction activities extends to other housing types, with semi-detached and row units experiencing declines of 22% and 17% year-over-year, respectively. However, despite these challenges, there has been a 1% increase in housing starts overall, primarily driven by a 15% surge in apartment dwelling starts, totaling 48,029 units during the first six months of 2023. Toronto and Vancouver have been the focal points for construction activity, accounting for nearly two-thirds of housing starts among the six metro areas.
Regional disparities in construction trends have been observed, with Vancouver, Toronto, and Calgary experiencing increased construction levels in contrast to declines in Montreal, Edmonton, and Ottawa. Montreal’s more significant decline of 58% year-over-year in housing starts is attributed to shorter construction periods and a greater proportion of low-rise structures. Conversely, Toronto’s longer planning-to-construction timeline for large apartment projects has resulted in growth, despite ongoing economic challenges, such as high interest rates. The CMHC anticipates that apartment starts in Toronto and Vancouver will return to 2022 levels due to sustained high rental demand.
Published by Steve Huebl