Canadian Housing Starts (January 2024)

Marc Ercolao, Economist 

Date Published: February 15, 2024

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Housing starts pulled back in January after December surge

    • Canadian housing starts came in at 223.6k annualized units in January, representing a 10% month-on-month (m/m) decrease from December's level. The monthly pullback took the six-month moving average down for a second consecutive month to 244.8k units.
    • Multi-family urban starts declined by 14% m/m to 191.5k units in January, marking a retracement after last month's big gain. Urban single-detached starts remained flat on a monthly basis at 43.3k units.
    • Urban starts were down in 7 of 10 provinces:
      • B.C. accounted for most of the decline, as starts fell by 31k. Ontario registered a gain of 11.8k, while Quebec was roughly flat. 
      • Starts fell in the Atlantic by around 5% (to 12.1k units), led by Nova Scotia and New Brunswick.

    Key Implications

    • The beginning of 2024 saw housing starts pare some of their recent strength after a strong rebound in December. The level of homebuilding is still elevated relative to historical norms, but today's print supports our view that near-term starts will remain subdued in spite of the recent strength in home sales. 
    • It's no surprise that Canada needs to accelerate the pace of homebuilding to prevent a continual deterioration in housing affordability. While today's report doesn't inspire any change to our fairly muted forecast, the prospects for BoC policy rate cuts may add some fuel to existing home sales in the coming months, potentially propping up new home building as a result.