Canadian Housing Starts (May 2024)

Housing starts jump higher in May

• Canadian housing starts came in at 264.5k annualized units in May, representing a 10% month-on-month (m/m) increase from April's level. The six-month moving average of starts was up 4% m/m at 247.8k units.
• In urban markets, gains were notched for both single-detached (2% m/m to 43.0k units) and multi-family (13% to 203.1k units) starts. 
• Regionally, gains were driven by the Atlantic provinces (+5.1k to 16.5k units), Quebec (+20.8k to 51.7k units) and Ontario (+12.4k to 82.3k units). In the latter two provinces, strong gains were recorded in Montreal and Toronto, concentrated in the multi-family sector. In contrast, starts declined in the Prairies (-5.2k to 51.3k units), driven by a decline in Manitoba, and B.C. (-8.4k to 44.3k units). 

Key Implications

• Builders broke ground on a surprisingly healthy number of units last month. With May's solid performance, urban starts are averaging 233.7k units, about 5% above their 1st quarter level. This points to some positive contribution to overall economic growth in Q2 via the new construction component of residential investment.
• Last month's healthy print left starts trending well above their pre-pandemic run rate. That said, starts are slowly, but surely declining from the multi-decade highs observed over 2021/2022, weighed down by Ontario and Quebec. Across structure types, construction of single and semi-detached units has dropped, although multi-family units could soon join this downtrend, given weak pre-sale activity in recent years and elevated borrowing and construction costs.           

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