Housing starts slow further as CMHC sees no near-term turnaround

Canada Mortgage and Housing Corp. reported a 15% decline in the seasonally adjusted annual pace of housing starts in January and a 3.5% drop in the six‑month moving average.

The pace of homebuilding in Canada has continued to slow, according to Canada Mortgage and Housing Corp. The agency reported a 15 per cent decline in the seasonally adjusted annual pace of housing starts for January. Its six‑month moving average also fell, marking the fourth consecutive monthly decline in that trend. CMHC cited a range of pressures on builders and developers including higher costs and weaker demand. Key details: - January's seasonally adjusted annual rate was 238,049 units, down from 280,668 in December. - The six‑month moving average of the seasonally adjusted annual rate was 254,794 units for January, a 3.5% decline. - CMHC deputy chief economist Tania Bourassa‑Ochoa said the six‑month trend has decreased for the fourth consecutive month and that a near‑term turnaround looks unlikely. - The agency pointed to trade and geopolitical uncertainty, high construction costs, weaker demand, rising inventories and lower immigration numbers as constraints on developer activity. - The report also noted the federal government launched Build Canada Homes last September with an initial $13 billion to support construction activity. Summary: The figures point to weaker new‑construction activity and persistent constraints on developer activity and housing supply. CMHC expects new construction to continue trending lower. Undetermined at this time.