‘More housing starts means more homes’: CMHC economist

Tania Bourassa-Ochoa, Deputy Chief Economist at CMHC, joins BNN Bloomberg to discuss the increase in Canadian housing starts for the month of July.

As Canadians contend with a housing affordability crisis, an economist says more supply can lead to affordable markets after data from the Canadian Mortgage Housing Corporation (CMHC) revealed an uptick in housing starts in July.

The annual pace of housing starts in July rose four per cent compared with June across the country, according to a report from the agency Monday.

“More housing starts means more homes down the road,” Tania Bourassa-Ochoa, CMHC’s deputy chief economist, told BNN Bloomberg in a Monday interview. “We sincerely think that more supply is a key contributor to reaching more affordable markets down the road. It’s not the only factor, but it’s definitely a determining one. It is overall. When we’re looking at the national picture we’re moving one step into the right direction.”

The report, which takes into consideration single-family houses, townhouses or small condos and apartment buildings with five or more units, notes housing starts increased to 3.7 per cent in July, at 263,088 units.

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The seasonally adjusted annual pace of housing starts for Canadian centres with a population of 10,000 or greater was 273,618 units, up five per cent from 261,171 in June.

“That is still positive, because it means more employment in the construction industry,” said Bourassa-Ochoa. “It is more materials that will be bought down the road. It is good for our economy.”

Toronto market expected to decline

Despite the optimism in markets nationwide, Bourassa-Ochoa said Toronto continues to see slower housing starts, a trend she says has been seen for almost a year now.

“The condominium market is really what’s triggering that so we’re seeing a lot of projects that are either being cancelled or postponed,” said Bourassa-Ochoa. “That decline in activity and the condominium side is really pulling the housing starts down.”

The report notes a decrease in multi-unit starts and single-detached starts drove a 69 per cent year-over-year decrease in Toronto’s housing starts compared to July 2024. She said it’s been a gradual decrease, and expects to see that continue further, but notes housing starts are not necessarily reflective of real time housing market conditions.

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“What I mean by that is it takes a lot of time between the time that a project is thought about and proposed, and the housing start, which is the moment when the foundation is actually poured,” said Bourassa-Ochoa. “With that in mind, there is a significant lag between an investment decision or developer sentiment, if you will, and the actual housing starts.”

Growth in Montreal rentals

The agency report Montreal saw a 212 per cent year-over-year increase in housing starts compared to July 2024, driven by significantly higher multi-unit starts.

“It’s definitely multi-unit construction, but it’s purpose built rentals that we’re seeing in Montreal,” said Bourassa-Ochoa. “It’s spiked in the numbers in July, so there’s definitely some large projects that the foundation is being completed, basically, but this is rental housing. It’s not necessarily the same type of housing that we’re seeing in Toronto or in Vancouver decline. On the condo side in Montreal, we’re also seeing very few projects that are moving forward.”

Vancouver sees growth but market volatile

Vancouver recorded a 24 per cent increase in starts this month, also driven by higher multi-unit starts. Bourassa-Ochoa however noted that the market can be volatile.

“There’s still growth there… We have to keep in mind that it is very volatile, in a sense, where it could change a lot month to month, depending on what is being put forward,” said Bourassa-Ochoa. “Generally speaking, when we’re looking at Vancouver, since the beginning of the year, we’re also seeing that the condominium market has slowed down quite significantly. We’re seeing some projects being cancelled, and so we’re seeing housing starts for the seven first months of the year, we’re seeing that those numbers come down.”

With files from the Canadian Press