The latest building permit numbers from Statistics Canada are sending a hopeful signal, but the housing market is facing a contradiction.
There was very strong building permit activity to end 2024. December saw an 11% surge over November to $31.15 billion, well above the 1.4% increase that had been forecast. On a constant dollar basis, which adjusts for inflation, total building permits were up 8.8% for December and 30.5% year-over-year.
The increase was led by residential permits which rose more than 20%, to nearly $9.0 billion. The biggest gains came from multi-family dwellings which saw a 33.3% increase, to $6.1 billion. Single-family permits rose a little less than 2.0%, to $2.9 billion.
For the whole year in 2024, the total number of permits for new housing units came in at 287,100. Multi-unit housing was the big contributor for the year with $34.1 billion in permits (+12.2%). Single-family permits declined 30.9% to $18.6 billion.
Building permits serve as an early indicator of intentions to build, but they do not set out any timelines for construction. So, despite the big finish last year actual housing starts dropped 13% in December. For the whole year, starts increased by just 2.0%. The key driver of that was record high rental construction.
The slow pace of construction has the Canada Mortgage and Housing Corporation warning that the country may not achieve its 2030 affordability goals. Those concerns have been deepened by a slowdown in condominium construction and the impending trade war with the United States.