National housing supply slowed in February, with housing starts falling by about 2,000 units on a monthly basis.
The national trend in housing starts was 242,777 units last month, up from 244,963 units in January, according to new data from the Canada Mortgage and Housing Corporation (CMHC).
The seasonally adjusted monthly annual rate (SAAR) for housing starts for all Canadian markets was 245,922 units in February, down about 13.5% from January levels.
“The national housing starts trend declined in February, but remained high,” said Bob Dugan, chief economist for the crown corporation. “Starts for single-family SAAR homes fell in February after strong growth in January, particularly in Montreal. Multi-family SAAR starts also fell in several centers in February, further contributing to the downturn in the overall trend.
SAAR urban starts fell 14% in February to 231,042 units. Multiple urban starts fell 15.8% to 163,757 units in February, while individual urban starts fell 9.3% to 67,285 units.
“The two big challenges that Canadian housing markets continue to face are the same ones that we have been facing for months – COVID-19 and the lack of supply,” said Costa Poulopoulos, president of the Canadian Real Estate Association.
Despite the slowdown, however, CMHC has argued that these readings are significantly higher than pre-pandemic levels, largely driven by strong demand.
With low interest rates fueling the flames, Canadian households added about $ 108 billion in outstanding mortgage balances by November, according to another Statistics Canada report. This significantly exceeded borrowing intensity in 2018 (around $ 46 billion) and 2019 (around $ 72 billion).
“Government-orchestrated measures such as the Canadian Economic Recovery Benefit, the six-month mortgage deferral option offered by financial institutions and the reduction of the Bank of Canada’s key rate to its lowest level since The 2009 financial crisis helped support the housing market while mortgage borrowing remained resilient, ”StatsCan said.