Housing construction activity in Canada surged by 14% in September compared to the previous month, surpassing expectations, according to data released by the Canada Mortgage and Housing Corporation (CMHC). The seasonally adjusted annualized rate of housing starts reached 279,234 units, up from the revised figure of 244,543 units in August. Economists had forecasted a rise to 255,000 units.
CMHC’s deputy chief economist, Tania Bourassa-Ochoa, highlighted that the six-month trend in housing starts was bolstered in September, driven by notably higher starts in Ontario, Quebec, and the Prairie provinces. She emphasized that Montreal and Toronto contributed over a quarter of the total monthly starts nationwide, primarily due to the uptick in new rental apartment construction.
Bourassa-Ochoa cautioned that the current housing starts levels reflect decisions made months or even years ago when investor confidence was stronger. The annual pace of housing starts for Canadian cities with populations of 10,000 or more increased to 254,345 units in September, a 16% rise from 219,408 units in August, while rural starts were estimated at 24,889 units.
Senior economist at BMO, Robert Kavcic, noted that September’s new builds exhibited resilience amidst challenging resale conditions. Housing starts have averaged 256,000 over the past year, signaling a significant increase from earlier lows. However, Ontario’s average of 63,000 housing starts in the last year is the lowest in a decade.
Kavcic observed that rental projects are the primary driver of housing starts, outpacing homeownership and condo construction combined.
