Canadian housing starts, also referred to as 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 predicted a rise to 255,000 units.
CMHC’s deputy chief economist, Tania Bourassa-Ochoa, highlighted that the six-month trend in housing starts surged in September, primarily fueled by substantial monthly increases in Ontario, Quebec, and the Prairie provinces. Notably, Montreal and Toronto accounted for over 25% of the total monthly starts nationwide, largely due to a rise in new rental apartment constructions.
Bourassa-Ochoa noted 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 in Canadian cities with populations exceeding 10,000 increased to 254,345 in September, marking a 16% rise from August’s 219,408. Rural starts were estimated at 24,889 units.
Despite challenging resale conditions, September’s new builds exhibited ongoing resilience, as highlighted by Robert Kavcic, a senior economist at BMO. Kavcic mentioned that housing starts averaged 256,000 over the past 12 months, showing an increase from earlier lows. However, in Ontario, the 12-month average for starts stood at 63,000, the lowest in a decade.
Kavcic emphasized that rental properties are steering housing starts, surpassing activity in homeownership and condos combined.