April 24, 2008
Economy at a Glance - April 25, 2008
First-quarter housing starts up in majority of Canada's cities
There are 33 Census Metropolitan Areas in Canada (i.e., urban areas with core populations of at least 50,000 people). Through the first quarter of this year, housing starts increased in 20 CMAs and declined in the other 13.
The six most populous cities in Canada are Toronto, Montréal, Vancouver, Ottawa, Edmonton and Calgary. Despite severe winter weather, Toronto (+60%) was a leader along with Calgary (+68%) in first-quarter starts. Ottawa (+37%), Montréal (+26%) and Vancouver (+19%) also had gains. In all five of those centres, it was multiple-unit starts that pulled up their totals. Only Edmonton (-31%) had a tail-off in combined starts.
There has been a large disconnect of late between the “singles” market and “multiples”. For all 33 CMAs, singles were -12% in January through March 2008 versus the same period last year, while multiple-unit starts were +51%. The strength in multiples is largely a carry-over of condominium sales from 2007. Manpower and material shortages caused ground-breakings to be delayed until early this year.
Sales-of-existing-homes is often a harbinger of what to expect in new housing demand. According to figures based on the multiple listing service of The Canadian Real Estate Association, existing home sales dropped off dramatically in the first quarter of this year. March alone was -18.7% versus the same month last year. Furthermore, a big increase in the number of listings in the latest month points to a likely deceleration in home price increases, from over +10% nation-wide in the last several years to a softer +5% at most.
For more articles by Alex Carrick on the Canadian and U.S. economies, visit his blog and Market Insights.
Percent Change in Year-to-Date Housing Starts - Ranking of Canada's Major Cities
(January-March 2008 vs January-March 2007)
*Canada's Census Metropolitan Areas (CMAs) have core populations of 50,000 plus. Data source: Canada Mortgage and Housing Corporation (CMHC) (based on actuals rather than seasonally adjusted data). Chart: Reed Construction Data - CanaData.
