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CHARLOTTETOWN — Canadian housing starts excluding the province of Quebec fell 20.4 per cent in May compared with the previous month as groundbreaking decreased on both multiple unit and single-detached urban homes, data from the national housing agency shows.
However, Atlantic Canada is expected to see "relatively smaller" declines in housing indicators over the next 12 months compared with the rest of Canada, according to Kelvin Ndoro, a senior analyst with the Canadian Mortgage and Housing Corporation.
In the most recent CMHC housing market outlook, its upper-end forecast for housing prices in 2020 shows a drop in Nova Scotia from $257,650 to $243,113, in Prince Edward Island from $243,373 to $224,402 and in Newfoundland and Labrador from $235,363 to $231,932.
Ndoro said that before COVID-19, the housing market in Atlantic Canada was healthy and relatively affordable. Also, the number of COVID-19 cases and lockdowns haven't been as severe in Atlantic Canada compared with places like Ontario and Quebec.
There are also fundamental differences between the housing market in Toronto and urban centres in Atlantic Canada, he said. These include people migrating to Atlantic Canada from Ontario.
"What has happened in the last two years, a loss for a city like Toronto has actually been a gain for the Atlantic provinces. We've seen that in Halifax, Moncton and Charlottetown, as well," Ndoro said.
He is also keeping an eye on the impact international immigration is going to have on demand and resale in the housing market. So far, Newfoundland and Labrador is seeing a 33 per cent decline in international immigration, whereas P.E.I. is down 18 per cent and Nova Scotia 44 per cent.
"These are some of the things that we need to get more data to better understand how the markets will be impacted," he said.
Nationally, the seasonally adjusted annualized rate of housing starts excluding Quebec fell to 132,576 units from a revised 166,477 units in April, CMHC said. Economists had expected starts to fall to 155,000.
Including Quebec, starts rose to 193,453 units in May from 166,477 units in April.
CMHC left Quebec out of the April survey after construction in the province was disrupted by measures to combat the coronavirus pandemic.