February Housing Starts Down

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Entrepreneur Centre

Overall Ontario Housing Starts Lowest Level Since September

THUNDER BAY – BUSINESS – Housing starts in Thunder Bay, Census Metropolitan Area (CMA) were trending at 266 units in February, down from 292 units in January according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“The trend’s downward movement in February marks the third month that the trend has moved negatively after a solid run-up that had begun in April of 2015. The decline can be attributed primarily to weaker multiple-unit housing starts, which include semi-detached homes, townhouses and apartments. Flat employment and a resale market moving into balance caused starts to slow in the last few months,” concluded Warren Philp, CMHC Market Analyst for the Thunder Bay CMA.

Ontario Construction Plateaued

Housing starts in the Ontario region were trending at 72,411 units in February, down from 75,145 units in January, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“The Ontario residential construction trend has plateaued – reaching its lowest level since September 2015. The apartment segment pulled overall construction activity lower while other dwelling types remained close to previous monthly levels. Despite improving economic conditions, lower levels of in-migration in recent years and a declining backlog of condominium sales that have yet to commence construction will result in lower levels of starts as we move through 2016,” said Ted Tsiakopoulos, CMHC’s Ontario Regional Economist.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next.

The standalone monthly SAAR was 136 units in February down from 368 units in January due to weak single-detached and multiple-unit housing starts.