June sees record spike in Canadian housing starts

Canada's declining trend in housing starts took a turn in June, witnessing a surge in actual housing starts. According to the Canada Mortgage and Housing Corporation (CMHC), the trend reached 234,974 units in June, marking a 2.4% increase from May's 229,520 units. This trend measure is based on a six-month moving average of the monthly SAAR (seasonally adjusted annual rate) of total housing starts across Canada.

The standalone monthly SAAR of total housing starts for all areas in Canada saw a 41% jump in June, reaching 281,373 units compared to May's 200,018 units. This spike in SAAR is mainly attributed to multi-unit starts, which accounted for around 82% of the total starts.

Among the urban centers, the monthly SAAR of total urban starts rose by 46% to 262,815 units in June. Multi-unit urban starts experienced a 59% increase, totaling 219,914 units, while single-detached urban starts saw a 3% rise to 42,901 units.

The cities of Vancouver and Toronto observed significant increases in total SAAR housing starts for June, with Vancouver rising by 71% and Toronto by 100%. Together, their housing starts made up 47% of the total in Canadian urban centers for the month. Montreal CMA also experienced growth in total SAAR housing starts, albeit at a rate of 8%. All three cities saw increases in both single-detached and multi-unit starts. The rural starts monthly SAAR estimate stood at 18,558 units.

"We observed a large increase in the SAAR of housing starts in June which pushed the trend of housing starts upward after consecutive monthly declines since November 2022," said Bob Dugan, chief economist at CMHC. 

"Despite this, total year-to-date housing starts for the first half of the year were 8% lower than they were over the same period in 2022 as the high interest rate environment continues to challenge housing starts through increasing borrowing costs."