Canadian Housing Starts (February 2023)

Canadian housing starts rebound in February

• Canadian housing starts came in at 244.0k annualized units in February, representing a 13% month-on-month (m/m) gain from January. Despite the increase, the six-month moving average dipped by about 4k to 255.7k units.
• February's increase in urban starts was spread across the multi-family and single-detached sectors, with the former advancing 18% m/m and the latter climbing 8% m/m.
• Broad-based gains in urban starts were observed regionally last month, with homebuilding up in 8 of 10 provinces:
  • In Ontario, starts increased by 26.4k to 98.4k units. 
  • In the Atlantic, urban starts advanced 1k to 6.4k units, driven by gains in Nova Scotia, PEI and Newfoundland and Labrador.
  • Starts surged by 10.5k to 43.8k units in the Prairies, lifted by gains in all three Prairie provinces.   
  • Starts increased by 5.1k to 40.4k units in Quebec. In B.C., they declined by 12.8k to 33.7k units.

Key Implications

• As expected, starts rebounded in February after an outsized January decline that was driven by the volatile multi-family sector. Several factors remain supportive for homebuilding, including cooling cost pressures for several key inputs like lumber and low inventory levels.
• Still, the pace of starts has moderated, and figures to move even lower moving forward as past declines in demand weigh on homebuilding. We are likely seeing some evidence of this already, with single-family starts pulling back to a relatively large extent in recent months. This is consistent with outsized sales weakness in this category last year.           

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