Housing Starts: Diverging Trends in the US and Canada
Residential construction in both Canada and the United States faces a similar set of challenges, but the outcomes differ significantly across the border. While both countries grapple with issues such as high construction costs, regulatory constraints, and land availability, the pace and type of housing construction in each nation reveal distinctive trends.
In the United States, housing starts have yet to recover to pre-Great Recession levels seen before the 2007-08 economic downturn. A key distinction, however, lies in the type of housing that is being built. In the U.S., single-family homes account for a substantial proportion of new housing starts, overshadowing the number of multi-family unit constructions. This preference for ground-oriented housing reflects the enduring demand for single-family homes, which continues to shape American residential construction.
Canada, by contrast, particularly in large urban centres, has experienced a sharp increase in multi-family housing starts, such as condominiums and apartment buildings, which often surpass single-family home construction. This shift towards multi-family development is largely driven by high land prices, urban densification policies, and demand for housing in city cores, leading to a greater focus on high-density living spaces.
The implications of this disparity are profound. In Canada, the prevalence of multi-family residential units and the relative scarcity of new ground-oriented single-family homes contribute to elevated prices for the latter. Ground-oriented housing remains highly desirable, but limited supply in the face of high demand continues to inflate prices, placing single-family homes out of reach for many Canadians.
Therefore, looking solely at housing start numbers without accounting for the types of housing being built can obscure important nuances. In Canada, residential construction is increasingly dominated by multi-family developments, a trend that has deep ramifications for housing affordability, urban planning, and the availability of family-oriented housing.
US Housing Starts
Canada Housing Starts