Home building picks up in April except in Toronto

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The pace of new home construction started to reverse course in April, bucking a downtrend that has been in place for most of the year, according to data from the Canada Mortgage and Housing Corporation.

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Standalone housing starts grew eight per cent month-over-month to 267,330 units, the CMHC said, with the six-month, seasonally adjusted moving average also growing to 257,846 units, up from 253,226 units in March.

“On a trend and monthly (seasonally adjusted annual rate) basis, the level of housing starts activity in Canada remains historically high, hovering well above 200,000 units since June 2020 and increased from March to April,” said CMHC chief economist Bob Dugan in a press release accompanying the data.

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“The increase in monthly housing starts in Canada’s urban areas was driven by higher multi-unit and single-detached starts in April. Among Montreal, Toronto and Vancouver, Toronto was the only market to post a decrease in total starts, which was driven by lower multi-unit and single-detached starts,” Dugan added.

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Toronto saw a 38 per cent decrease in its seasonally adjusted, annualized pace, with starts falling to 24,605 units in April. Toronto has been facing a housing supply shortage that has struggled to keep up with the immense demand in Canada’s most populous city. Housing will be a key issue in the upcoming Ontario provincial election as party leaders tout their plans to address housing affordability.

In the province’s latest budget in April, the Ford government promised to set a target of 1.5 million new homes over the next 10 years.

The plan would also target demand, as Finance Minister Peter Bethlenfalvy said the government would stick to its plan of increasing the Non-Resident Speculation Tax to 20 per cent from 15 per cent.

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Liberal leader Steven Del Duca’s housing platform includes a similar plan to add 1.5 million homes. He would also create an Ontario Home Building Corporation to build affordable homes for first-time buyers, as well as relax zoning rules to allow for more multi-family buildings.

Overall, urban housing starts saw a 10 per cent monthly boost in April to 245,324 units, largely driven by multi-unit gains of 14 per cent to 178,092 units. Single-detached urban starts increased by about one per cent for the month to 67,232 units. Housing starts in rural areas came in at an adjusted annual rate of 22,006 units.

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