The Canada Mortgage and Housing Corp. reported a 17% decrease in the annual rate of housing starts in October compared to September. The seasonally adjusted annual rate for new home construction was 232,765 units in October, down from 279,174 units in the previous month. Tania Bourassa-Ochoa, the deputy chief economist at CMHC, attributed the decline to lower numbers of starts in Ontario and British Columbia but noted that markets in Montreal, Calgary, and Edmonton experienced increased starts, keeping the national year-to-date total higher than the same period last year.
In October, actual housing starts in areas with populations of 10,000 or more totaled 19,174 units, a slight decrease from 19,763 in October 2024. The year-to-date total for these areas was 197,207 units, up from 188,660 units in the same period in 2024. The six-month moving average of the seasonally adjusted annual rate of total housing starts was 268,907 in October, showing a decrease from 277,081 in September.
Bourassa-Ochoa highlighted the significant regional variations in housing construction trends across the country, indicating that the results reflect past investment decisions. Rishi Sondhi, an economist at TD Economics, observed that builders are commencing new units at a healthy pace, particularly in the purpose-built rental market. He noted that homebuilding in regions outside Ontario is stronger due to a decline in condo construction in Ontario.
Sondhi predicted a further decrease in new construction starts in the short term, pointing out that homebuilding is expected to slow down next year. This projection is based on factors such as modest population growth affecting rents and weak pre-sales activity impacting starts in the ownership market.
