Canada’s housing starts, also known as new home construction, rose 14 per cent in September compared with the previous month, a steeper increase than expected, data from the national housing agency showed on Thursday.
The seasonally adjusted annualized housing construction rate was 279,234 units, up from a revised 244,543 units in August, the Canada Mortgage and Housing Corporation (CMHC) said.
Economists expected new construction to rise to 255,000 units.
“The semi-annual trend in housing starts increased in September, driven by significantly higher monthly starts in Ontario, Quebec and the Prairie provinces,” Tania Bourassa-Ochoa, CMHC deputy chief economist, said in a news release.
It noted that Montreal and Toronto were responsible for more than 25 per cent of total monthly starts nationally, largely thanks to an increase in the construction of new rental apartments.
“While these results indicate some resilience, it is worth noting that current levels of housing construction generally reflect decisions made months or even years ago, when investor confidence was higher than today,” Bourassa-Ochoa said.
The increase came as the annual pace of housing construction in Canadian cities with a population of 10,000 or more rose to 254,345 in September, up 16 per cent from 219,408 in August.
The annual rate of rural starts was estimated at 24,889.
New construction started in September showed “continued resilience despite difficult resale conditions,” Robert Kavcic, senior economist at BMO, wrote in a note to clients.
Housing starts now average 256,000 over the past 12 months, a jump from the lows seen at the beginning of the year, Kavcic noted. However, starts in Ontario have averaged 63,000 over the past 12 months, the lowest level in a decade, he added.
“Rentals continue to drive housing construction, and activity in that segment now exceeds homeownership and condominiums combined.”
