Housing starts in the Toronto Census Metropolitan Area (CMA) trended higher at 38,355 units in May compared to 32,614 in April according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR)(1) of housing starts.
“Housing starts trended at their highest level in over two years in May. Building activity was strongest in the 905 areas, with condominium apartment starts leading the way.” said Dana Senagama, CMHC’s Principal of Market Analysis for the GTA. “High cost of land and scarcity of serviceable lots appeared to induce more high density construction into the suburbs”.
CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next.
The stand alone monthly SAAR was 58,351 units in May, up from 38,731 units in April. This was the result of an increase in apartment starts this month.
The City of Toronto and the City of Mississauga recorded the first and second highest number of starts in May respectively. Both of these municipalities had a significant number of apartment starts. The next highest number was recorded in the City of Vaughan, which also had a large number of apartment starts, as well as single-detached units.
As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.
(1) All starts figures in this release, other than actual starts and the trend estimate, are seasonally adjusted annual rates (SAAR) – that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. By removing seasonal ups and downs, seasonal adjustment allows for a comparison from one season to the next and from one month to the next. Reporting monthly figures at annual rates indicates the annual level of starts that would be obtained if the monthly pace was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.