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Local housing starts drop, but at least one official predicts that will change in coming months

September 19, 2024
2:43 PM
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While housing starts in the region tumbled in August, it’s not surprising and could actually presage a sharp increase by the spring, says the executive director of the Greater Ottawa Home Builders’ Association. Earlier this week, the Canada Mortgage and Housing Corp. reported that Ottawa-Gatineau’s annual pace of housing starts dropped 39 per cent in August compared to July. The national housing agency said the region’s monthly seasonally adjusted annual rate of housing starts in August was 9,002, down from 14,774 the previous month. The annual pace of multi-unit urban starts saw an even bigger decline, falling 47 per cent to 6,984, compared to 13,176 in July. Single-unit starts, meanwhile, saw an increase, rising 26 per cent from 1,598 in July to 2,018 in August. Ottawa’s pace of housing starts has slowed this August compared to the same time last year. Builders started work on 745 new housing units in Ottawa-Gatineau last month, a 40-per-cent drop from the 1,245 starts recorded in August 2023. Single-detached starts fell 25 per cent to 163 compared with the previous year, while multi-unit starts dropped by 43 per cent to 582. “While we’re not seeing the housing activity we’d like to see, it’s not surprising given the current economic conditions keeping potential homebuyers on the sidelines,” Jason Burggraaf, executive director of the GOHBA, told OBJ in an email. Most municipalities across the province, he said, are seeing a similar trend. But in Ottawa, the tide could change in the next few months, he said. “I am optimistic as Ottawa has a number of larger multi-family developments in the pipeline which will improve that start number by the end of the year.” He said home sales are seeing good growth year-over year. So far this year, he said 2,300 new homes have been sold – a 35-per-cent increase from this time last year. “So again, while that growth in activity is slower than we’d like, it’s still a positive sign,” he said. “All of this means that there’s just more pent-up demand that’s building, so when the mass of buyers do decide to get back into the market, even if that’s the spring, demand – and starts – is going to skyrocket.” According to a new report from the city’s planning and housing committee, Ottawa is falling behind when it comes to housing. In the first six months of the year, the report found that construction began on 2,774 new houses. By provincial standards, that pace is too slow, the report said, as it accounts for just 22 per cent of the target for Ottawa in 2024 set out by the Ontario Ministry of Municipal Affairs and Housing. To be eligible for funding under the province's Building Faster Fund, municipalities must reach 80 per cent or more of the target. For Ottawa, the target for new dwellings is 12,583 by the end of the year.

Annual pace of housing starts in Canada slowed in August

Nationally, CMHC says the annual pace of housing starts in August slowed 22 per cent compared with July. The agency said the seasonally adjusted annual rate of housing starts came in at 217,405 units in August, down from 279,804 a month earlier. The drop came as the annual pace of urban starts fell 24 per cent to 199,478 units, compared with 261,043 in July. The annual rate of starts of multi-unit urban projects such as apartments, condominiums and townhouses dropped 29 per cent to 154,290 units, while the rate of single-detached urban starts rose three per cent to 45,188. The annual pace of rural starts was estimated at 17,927 units. CMHC says the six-month moving average of the seasonally adjusted annual rate of housing starts was 248,480 units in August, down 2.9 per cent from 255,794 in July. With files from The Canadian Press