Canadian housing starts, or new home construction, experienced a significant 14% increase 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 boosted in September, particularly driven by substantial increases in Ontario, Quebec, and the Prairie provinces. Montreal and Toronto accounted for over a quarter of the total monthly starts nationwide, largely due to a surge in new rental apartment constructions.
Bourassa-Ochoa pointed out that the current housing starts levels reflect decisions made months or even years ago when investor confidence was higher. The annual pace of housing starts for cities with populations exceeding 10,000 climbed to 254,345 units in September, marking a 16% increase from August’s 219,408 units. Rural starts were estimated at 24,889 units.
Senior economist Robert Kavcic from BMO noted that the September housing starts exhibited resilience despite challenging resale conditions. Over the past 12 months, housing starts have averaged 256,000 units, showing an uptick from earlier in the year. However, Ontario’s average of 63,000 starts over the last year is the lowest in a decade, according to Kavcic.
Kavcic highlighted that rental properties are currently the primary driver of housing starts, surpassing activity in homeownership and condos combined.