Canadian Housing Starts (December 2024)

Housing starts pulled back in December

• Canadian housing starts came in at 231.5k annualized units in December, marking a 13% month-on-month (m/m) decline from November's robust level. The six-month moving average of starts dipped to 242.6k units.
• December's decline was concentrated in the multi-family sector, with urban starts down 15% m/m to 168.5k units. Meanwhile, urban single-detached starts declined by 10% to 45.5k units.
• Urban starts were down in 8 of 10 provinces:
  
  
  • Starts were down in Quebec (-12.7k to 40.6k units) but were offset by a modest 4.2k increase in Ontario (to 63.7k units). They also pulled back, albeit modestly, across the Atlantic (-650 to 12.7k units), helped by a 1.1k increase in PEI.
  • Starts dipped across the Prairies (-20.4k to 51.5k units) dragged down by Alberta (-16.2k to 43.3 k units). Starts in B.C. also fell modestly (-4.1k to 45.4k units).

Key Implications

• Despite December's pullback, starts remained elevated on a trend basis, supported by purpose-built rental construction, which in turn has been lifted by robust population growth. Elevated home prices have also likely offered some support. Residential permit issue remains robust, pointing to further near-term gains.
• Even with starts running at a lofty level nation-wide, a divide has emerged between Ontario and other parts of the country. Starts are declining in the former (though December saw a bit of a rebound), as condo building is retrenching under the weight of weak demand. Further declines in Ontario are likely on tap for this year, which, when combined with cooler population growth, points to a pullback in Canadian starts in 2025.           

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.