Houses are shown under construction in Toronto on Friday, June 26, 2015.

Houses are shown under construction in Toronto on Friday, June 26, 2015.
Photo Credit: PC / GRAEME ROY

Canada housing starts surge on condo demand: CMHC

Canadian housing starts blew past expectations to their highest level in almost 10 years, fueled by the construction of multifamily dwellings in Toronto, Canada Mortgage and Housing Corporation (CMHC) reported Friday.

In November, the seasonally adjusted annualized rate of housing starts across Canada was 252,184 units — up from 222,695 units in October.

That now marks six straight months that housing starts hover above the 200,000 mark, and leaves 2017 on track for the largest number of new units in a decade at about 221,000 units, said Robert Kavcic, senior economist at BMO.

‘Rock-solid’ homebuilding

Housing Starts in Canada – All Areas. November 2017 (CNW Group/Canada Mortgage and Housing Corporation)

Urban multi-unit starts surged to a record 175,016 units up 16.9 per cent, while single-detached urban starts were up 7.5 per cent to 60,396 units and rural starts were estimated at 16,772.

“Canadian homebuilding activity remains rock-solid, backed by underlying demographic support—accelerated international immigration, provincial flows into Ontario and B.C., and new millennial households,” Kavcic said in a research note to clients. “Builders in the biggest cities appear to be responding to supply shortages as best as possible given permitting delays and development constraints.”

CIBC World Markets chief economist Avery Shenfeld said in a note that the size of the increase was “stunning” but it “doesn’t clash as much with other Canadian housing indicators as you might think.”

“Home sales have slowed, but with builders focused on condos that are started well after most of the units have been bought, it’s going to be a while before quieter sales offices mean fewer cranes on the horizon.”

Josh Nye, an economist with RBC, said housing starts are picking up elsewhere in the country alongside resales in Quebec and British Columbia, also led by the multi-unit segment. And new construction in the Prairies continues to increase, as Alberta and Saskatchewan’s economies recover from the drop in oil and commodity prices, Nye said.

With files from The Canadian Press

Categories: Economy
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