Housing starts fall in May outside Quebec

OTTAWA — The annual pace of housing starts, excluding Quebec, in May fell 20.4 per cent compared with April, Canada Mortgage and Housing Corp. said Monday.

Excluding Quebec, the annual pace of housing starts fell to 132,576 in May compared with 166,477 in April as the pace of starts in Ontario slowed 40 per cent.

Housing starts have remained strong in the capital region. B.C. declared construction an essential service and developers have continued to build.

Greater Victoria housing starts jumped by 30.65 per cent in May compared with the same month last year.

A total of 260 homes got underway last month in the capital region, with the West Shore responsible for 99, followed by Sidney with 82, and Saanich and Central Saanich together at 52.

Apartment-style homes accounted for 177 of those homes.

In May 2019, a total of 199 homes were started in the region.

Between January and May of this year, a total of 1,357 homes were started. That’s down slightly, by 2.7 per cent from the same months last year when 1,395 homes got underway.

The West Shore led starts for those months, with 999 this year, and 783 last year.

The housing agency did not conduct its monthly starts and completion survey in Quebec in April following the introduction of pandemic measures in late March that brought construction in the province to a halt.

It said home construction in Quebec resumed on April 20 and it resumed the survey in the province in May.

Including Quebec, the annual pace of housing starts rose to 193,453 for May.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 196,750 units in May, down from 198,644 in April. Excluding Quebec, the moving average was 151,072 in May, down from 155,600 in April.

TD Bank economist Rishi Sondhi said homebuilding has generally remained resilient in the face of the pandemic.

“While this result may surprise some, we note that homebuilding is in part a function of past housing demand, which has been strong,” Sondhi wrote in a report.

“In addition, most provinces didn’t shutdown their construction sectors in response to the outbreak.”

Sondhi noted that it is fair to question how long this resilience will hold up.

“Permit issuance pulled back sharply in April, which could flag near-term weakness ahead. Looking further out, the prospect of significantly slower population growth in coming quarters dims the medium-term prospects for homebuilding.”

In its outlook last month, CMHC said existing home sales are likely to fall between 19 and 29 per cent from their preCOVID level before beginning a slow, gradual recovery in 2021.