Housing starts took a nosedive last month as developers put the brakes on new apartment projects and continue “to manage their inventories,” the Canada Mortgage and Housing Corp. said Thursday.
Builders started work on 367 homes last month, less than half the 754 homes started in November 2015, the Crown corporation stated.
For the first 11 months of the year, however, housing starts in 2016 are outpacing last year’s totals. Developers have started work on 4,772 homes so far this year, compared to 4,550 at the same point in 2015.
One trend that’s emerging this year, according to the CMHC, is the rising popularity of row houses and townhomes.
Starts in this dwelling category – single-family homes built side-by-side and joined by common walls – trended upwards for eight straight months this year before declining in November.
Developers in Ottawa have constructed almost as many row houses as single-detached houses this year, the CMHC says, suggesting prices played a factor.
“Rows are a viable alternative for households shopping on price-point as they are the most affordable dwelling type in the market, as well as relatively spacious," said Anne-Marie Shaker, the CMHC’s senior market analyst for Ottawa, in a statement.In addition to reporting actual housing starts, CMHC also calculates a seasonally adjusted six-month rolling annualized average to show trends in new home construction and smooth out the spikes caused by large multi-residential projects.
This measurement also illustrates a local slowdown in November, with the industry trending at 5,874 annualized starts, down from 6,185 in October.
Nationally, the number of new home construction projects dipped slightly last month.
The CMHC said the seasonally adjusted annual rate of housing starts in all areas of the country fell to 183,989 units in November, down four per cent from 192,297 units in October.
In urban areas of Ontario, the seasonally adjusted rate of starts declined to 55,232 units, down 32 per cent from the previous month.
That's in contrast to urban areas of B.C., which saw an increase of 73 per cent to 44,019 units.
RBC economist Josh Nye says he anticipates the decline in home construction will continue next year, with starts falling by about 10 per cent as recent mortgage rule tightening by Ottawa causes existing home sales to fall.
– With a report by the Canadian Press