CMHC: Housing Starts Decline Continues with No Rebound Expected
The Canadian housing market is facing significant challenges, according to the latest report from the Canada Mortgage and Housing Corporation (CMHC). The data reveals a continued decline in housing starts with no immediate rebound in sight.
Decline in Housing Starts
In January, the seasonally adjusted annual rate of housing starts dropped by 15 percent, falling to 238,049 units from December’s figure of 280,668 units. This downturn overshadowed the previous month’s increase.
Long-Term Trends
The CMHC reported that the six-month moving average for housing starts also fell by 3.5 percent. This marks the fourth consecutive month of decline. Deputy Chief Economist Tania Bourassa-Ochoa noted that ongoing trade uncertainties and high construction costs are impacting development.
- January’s annual rate: 238,049 units
- December’s annual rate: 280,668 units
- Six-month moving average: 254,794 units
Impact of Broader Economic Factors
Several factors are contributing to this decline in housing starts. Lower immigration rates and economic uncertainties linked to U.S. trade policies are putting pressure on demand. Bourassa-Ochoa emphasized that a near-term recovery seems unlikely based on feedback from builders.
Year-Over-Year Comparison
Despite the overall decline, actual housing starts in larger centers (populations of 10,000 or more) saw a one percent increase year-over-year. A total of 16,088 unit starts were recorded in these regions in January, up from 15,957 the previous year.
Government Initiatives
In response to housing challenges, the federal government has taken steps to boost construction. Last September, it introduced Build Canada Homes, an initiative aiming to accelerate housing development. The program is set to provide an initial funding of $13 billion to support financing, land provision, and project initiation.
- New agency: Build Canada Homes
- Initial funding: $13 billion
Historical Context
The current housing target seeks to double construction to 500,000 homes annually over the next decade. This goal stands in contrast to the previous maximum of 260,000 homes built in the mid-1970s, underscoring the challenges faced by the current administration.
As the CMHC continues to monitor the housing landscape, stakeholders remain cautious about future developments in construction and housing availability.
