Housing starts down from earlier in the year

New home building starts in Canada are declining, according to the latest data, though activity remains robust, a new report says.

“Starts continue to run at a healthy level, buoyed by elevated prices and low levels of unsold new home inventories,” the recent TD Economics report says.

October starts data in Canada showed annualized activity in October fell 11 per cent from September to 267,100 starts, with the sixmonth moving average remaining about 277,000 units in Canada.

Multi-family activity declined the most, down about 13 per cent to about 188,000 units on a 12-month basis ending Oct. 31.

In contrast, single-family homes fell by about four per cent month over month to 57,000 new dwellings annualized.

Ontario experienced the largest drop at nearly 34 per cent from September to October, falling more than 44,000 starts annualized to nearly 87,000 units.

The Atlantic region also saw a decline in month-over-month starts by 3,300 units, annualized to about 5,300. Alberta, Saskatchewan and Manitoba saw starts increase in October from September by nearly 15,000 annualized, an increase of about 30 per cent.

The report says the overall decline in activity is in line with TD Economics' fourth-quarter forecast for the year, which predicted a decline in investment in new projects.

Furthermore, the recent downtrend in permit issuances suggests activity in the near term will continue to decline, the report says.

TD Economics predicted the pace of new homes development in Canada should moderate in 2023 due to the dampening affect of higher interest rates.