Canadian housing starts, also referred to as new home construction, experienced a 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 August figure of 244,543 units. Economists had predicted a rise to 255,000 units.
Tania Bourassa-Ochoa, CMHC’s deputy chief economist, highlighted that the six-month trend in housing starts escalated in September, primarily fueled by notable 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 the uptick in new rental apartment constructions.
Bourassa-Ochoa emphasized that while the results demonstrate some resilience, 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 a population of 10,000 or more 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 annually.
Senior economist Robert Kavcic from BMO mentioned in a client note that September’s new builds exhibited ongoing resilience despite challenging resale conditions. Housing starts have averaged 256,000 over the past year, showing a significant increase from earlier lows. However, Ontario’s starts have averaged 63,000 over the same period, the lowest in ten years.
Kavcic also pointed out that rental properties are the key driver of housing starts, surpassing both homeownership and condo construction activities combined.
