Canadian housing starts, also known as new home construction, experienced a 14% increase in September compared to the previous month, surpassing expectations, according to data released by the national housing agency. The seasonally adjusted annualized rate of housing starts reached 279,234 units, up from the revised August figure of 244,543 units reported by the Canada Mortgage and Housing Corporation (CMHC). Economists had anticipated a rise to 255,000 units.
Tania Bourassa-Ochoa, CMHC’s deputy chief economist, highlighted that the upward trend in housing starts over the past six months was primarily driven by substantial increases in monthly starts in Ontario, Quebec, and the Prairie provinces. Montreal and Toronto accounted for over a quarter of the total monthly starts nationwide, primarily due to a surge in new rental apartment construction.
Bourassa-Ochoa emphasized that while the results indicate some resilience, it is essential to consider that current housing starts levels reflect decisions made months or even years ago when investor confidence was higher. The annual pace of housing starts for Canadian cities with a population of 10,000 or more rose to 254,345 units in September, marking a 16% increase from August’s 219,408 units, while rural starts were estimated at 24,889 units.
Robert Kavcic, a senior economist at BMO, noted that September’s new builds demonstrated continued resilience despite challenging resale conditions. Housing starts have averaged 256,000 over the past 12 months, showing an increase from earlier lows in the year. However, Kavcic pointed out that Ontario’s starts averaged 63,000 over the last year, the lowest in a decade. Rental properties are currently the primary driver of housing starts, surpassing activity in homeownership and condos combined.