New housing starts in March strong across Canada
Canada’s collective love affair for real estate doesn’t look to be slowing. The figures for new housing starts in March were very strong across the country, indicating that the dour real estate sentiment that’s been circulating isn’t sinking the optimism of builders.
Nationally, the seasonally-adjusted annualized rate (SAAR) of housing starts hit a post-recession high of 215,600, which is 17 per cent higher than a year ago. This marks the fourth consecutive month that SAAR housing starts have trended above 200,000.
To give some perspective on the national figure, during the ‘90s housing starts averaged 150,000 before jumping to an average of 225,000 during the five years leading up to the recession. The construction industry tends to go in cycles, based on demographics and economic growth, but it’s clear that the pace of construction has been exceptionally strong over the past decade.
The vast majority of the jump in the national figure was due to the strong activity in Ontario and Alberta. In Alberta, SAAR housing starts hit 35,500 in March, which is 14,600 higher than this time last year. The jump in Alberta was even higher than in Ontario, where SAAR starts stood at 87,500, 13,300 higher than a year ago.
Because of strong net-migration levels relative to population, housing start statistics in Alberta are notoriously volatile. The current pace of construction in Wild Rose Country is well below boom year peaks, but it’s clearly strengthening. If the trend continues (and we start to see starts nearing 40,000+), it’ll fuel the labour market further after the rebound in energy investment already lit the flame.