The pace of housing starts in Canada fell by 22 per cent in November, the Canada Mortgage and Housing Corp. said Friday.
The agency says the monthly seasonally adjusted annual rate of housing starts in November came in at 212,624 units, down from 272,264 in October.
A housing start is defined as the beginning of construction work on the building where the dwelling unit will be located, according to CMHC.
Year-over-year trend, says economist
The decline in housing starts is part of a larger downward trend that has been witnessed over the last year, according to economist Mike Moffatt.
“If we look from January to November, so the last 11 months, we’re down about eight per cent since 2022. So that’s a really big issue,” he said.
The drop came as the annual pace of urban starts fell 23 per cent to 195,363 units, while the rate of multi-unit urban starts dropped by 27 per cent to 151,297.
Starts on single detached dwellings fell by seven per cent to 44,066 units.
“We’re seeing housing starts decline at a time where we have record population growth. So this is going to cause all kinds of tensions where we have more and more people chasing unfortunately fewer homes,” Moffatt said.
Bigger urban centres in particular are struggling. In Montreal, the rate of starts was down 30 per cent, while Toronto and Vancouver both saw a drop of 39 per cent, driven significantly by a reduction in new multi-unit dwellings, according to CMHC.
Moffatt said these trends are a reflection of economic struggles and high interest rates.
“A lot of the declines in housing starts have to do with economic conditions, particularly for apartment construction. You need to finance these projects upfront, right? And that’s a huge capital cost and with higher interest rates, a lot of builders and developers are just staying on the sidelines.”
The annual pace of rural starts for November is estimated at 17,261, according to CMHC.
“The CMHC tells us that we need to over double housing starts over the next seven to eight years and we’re not even keeping pace,” Moffatt added. “We’re seeing decreases.”
And as long as the decline continues, “the worse this crisis is going to get.”
Post-war style housing effort
A throwback to homes built after the Second World War and in response to the current housing crisis, the federal government says it will create a modern catalogue of prefabricated buildings that can be built quickly to house Canada’s booming population.
In an attempt to address what many advocates call a housing crisis, the federal government plans to resurrect a post-war effort to ramp up housing construction across Canada.
A consultation process will begin next month on developing a catalogue of pre-approved home designs to accelerate the home-building process for developers, Housing Minister Sean Fraser said earlier this week.
It’s a reboot of a federal policy from the post-Second World War era, when the Canada Mortgage and Housing Corp. developed straightforward blueprints to help speed up the construction of badly needed homes, Fraser said.
The idea of a catalogue of pre-approved blueprints was one of several recommendations of the National Housing Accord, a report co-authored by Moffatt that was released earlier this year.
With rising food bank usage and continuing difficulties of even middle-class families finding affordable places to live, Moffatt said that change can’t come soon enough.
“I fear that the situation’s only going to get worse unless those housing starts go up — and go up quickly.”
