Canadian Mortgage News

January 2005 National News Archive

2004 Housing Starts Post 17 Year High

OTTAWA, Ontario, January 11, 2005 — The seasonally adjusted annual rate¹ of housing starts was 234,400 in December, down from 242,600 in November, according to Canada Mortgage and Housing Corporation (CMHC).

New construction finished 2004 on a strong note, however, sales of existing homes through MLS^® have been trending lower since March 2004. This trend supports our view that the level of activity in the housing market will begin to slow in 2005. Housing starts will decrease 9.8 per cent to reach a robust 210,200 units in 2005. Sales of existing homes will also fall, nevertheless, 2005 will be the second most active year on record for MLS^® sales.

"New home construction posted a 17-year high in 2004 with an estimated 233,000 starts representing 6.7 per cent growth over 2003," said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "The home building industry responded to strong demand for housing which resulted from low mortgage rates and tight labour markets."

Residential construction activity ended 2004 with December housing starts in Canada's urban centres decreasing 3.8 per cent to a seasonally adjusted annual rate of 205,900 units. Urban single detached starts inched higher by 0.9 per cent to102,200 units in December while urban multiple starts declined 8.1 per cent to 103,700.

Urban housing starts in December eased in Quebec, Ontario and the Prairies where the seasonally adjusted annual rate of starts fell 5.0 per cent, 4.8 per cent and 8.3 per cent respectively. Urban housing starts in December increased in the Atlantic by 22.4 per cent, while British Columbia recorded no change.

The estimated number of seasonally adjusted annualized starts in Canada's rural areas was 28,500 units.

For the year 2004, actual urban starts increased 6.5 per cent compared with the same period last year. Single starts rose 3.6 per cent and multiple starts were up 9.7 per cent.

1. All starts figures in this release, other than actual starts, are seasonally adjusted annual rates (SAAR) — that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels.

Information on this release:

Bob Dugan
CMHC
(613) 748-4009
bdugan@cmhc-schl.gc.ca

For regional starts information contact:

Housing Starts, Actual and SAAR*

News source: Canada Mortgage and Housing Corporation (CMHC)