Canadian housing starts, also known as new home construction, increased 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 244,543 units in August, exceeding economists’ forecasts of 255,000 units.
Tania Bourassa-Ochoa, CMHC’s deputy chief economist, highlighted that the six-month trend in housing starts saw a notable uptick in September, primarily 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, predominantly due to a surge in new rental apartment constructions.
Bourassa-Ochoa emphasized that the current housing starts levels reflect decisions made months or even years ago when investor confidence was higher. In September, the annual pace of housing starts in Canadian cities with a population of 10,000 or more rose to 254,345 units, marking a 16% increase from August’s 219,408 units. Rural starts were estimated at 24,889 units annually.
Robert Kavcic, a senior economist at BMO, noted that September’s new builds displayed resilience despite challenging resale conditions. Housing starts have averaged 256,000 over the past year, a significant increase from earlier in the year. However, Ontario’s starts averaged 63,000 over the last 12 months, the lowest in a decade, with rental units leading the way in driving housing starts, surpassing both homeownership and condo constructions combined.
