New home starts in city higher in May than April

New homes starts in the Calgary census metropolitan area (CMA) in May were higher than those in April, but declined on a year-overyear basis, says Michael Mak, senior analyst, economics, market insights, west at Canada Mortgage and Housing Corp. (CMHC).

“Starts in the Calgary CMA in May, at 721, were higher compared to April by 25 per cent, but still slightly lower compared to May 2019’s starts of 812,” says Mak. “This uptick in activity reflects increased business activity as COVID -19 related measures are eased. While May’s starts indicate a sign of recovery in new home markets, three- and six-month averages continue to trend lower.”

The seasonally adjusted annual rate of starts (SAAR) in Calgary last month was 8,429 units, compared to 6,778 in April. This trend measure is a six-month moving average of housing starts, expressed as the total number of new home starts trending to be started in 2020.*

Across Alberta, in cities with populations of 10,000-plus, starts reached 1,601 homes last month, down from April (1,946) and May 2019 (1,798). Year to date, starts in these centres are ahead of last year — 8,641 compared to 8,185.

Across Canada, excluding Quebec, the trend in starts was 151,072, down from 155,600 in April.

“Our monthly Starts and Completions Survey (SCS) for April was conducted in each province with the exception of Quebec, following the introduction of pandemic measures in the province in late March,” says Bob Dugan, CMHC’S chief economist. “Residential construction in Quebec resumed on April 20. We have resumed the SCS in Quebec in May. The national housing starts totals, without Quebec, assess the impact of the COVID-19 pandemic where the SCS survey was conducted in both April and May.

“Outside of Quebec, the national trend in housing starts decreased in May. Higher multi-family starts in Ontario and the Atlantic provinces were offset by declines in British Columbia and the Prairies. We expect national starts to continue to register declines in the near term, reflecting the impact of COVID-19 measures.”

The stand-alone monthly SAAR of housing starts for all areas in Canada (excluding Quebec) decreased 20.4 per cent in May from April. The SAAR of urban starts decreased by 21.6 per cent month over month, while multiple urban starts decreased by 27.2 per cent and single-family urban starts were down 3.9 per cent.

*(CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations, analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.)