Canadian Housing Market Defies Challenges with Strong December Numbers
Strap on your work boots, pals! We're venturing into the Canadian construction scene - and heading out into the snowy January weather, which was quite the force for housing starts in Canada.
• Canada Mortgage and Housing Corporation (CMHC) announced that December saw a whopping 18% jump to 249,255 units in housing starts, despite a 22% plunge in November. Yowza!
• Now, if we narrow our view to the urban centres only (where at least 10,000 peeps reside), we have a 20% increase to 234,705 units. This includes a pretty significant 26% jump in multi-unit starts (we’re talking 191,463 units), but a 2% dip in single-detached unit starts (43,242 units).
• Meanwhile, it seems like the rural life was less appealing with starts dropping to a mere 14,550 units.
• Comparing 2023 against the previous year, it turns out the year wasn't as hot with starts in urban centres being 7% below 2022's levels.
• CMHC's big kahuna, Chief Economist Bob Dugan, points the finger at the single-detached starts for causing the overall decline with a 25% slip. He also attributes the fall to tighter economic conditions which affected multi-unit starts in Q4.
• Hold on to your hardhats: despite picking up in December, TD Economist Rishi Sondhi predicts starts are predicted to "trend lower" due to weaker resale and presale conditions. But there's hope in the condo space and rental construction.
• They say government's the big bad wolf, but it seems to be lending a helping hand here. Sondhi praises recent tax cuts on new rental construction. Due to governmental support, he doesn’t predict a total collapse of starts, although he does see a downtrend.
Well, there you have it, folks! Even though Canadian housing starts aren't exactly doing the cha-cha slide, it's not all gloom and doom. There's optimism in the air, especially if you're in the condo or rental construction market. We may have ended 2023 on a softer note but remember, every end is just a new beginning. So, stay positive, Canada, even if it's colder than a snowman's nose out there. The market might be as unpredictable as the weather, but as long as you've got your mittens on, you're ready for anything! Happy building, eh!