OTTAWA – The pace of housing starts in Canada slowed in September compared with August, but stayed over 200,000 for the fourth month in a row.
Canada Mortgage and Housing Corp. said Tuesday the seasonally adjusted annual rate of housing starts slipped to 217,118 units in September, down from 225,918 units in August.
The pace of multi-unit urban starts – condos, apartment buildings and the like – dropped 10.7 per cent to 131,388. That more than offset an increase in single-detached urban starts, which climbed 8.2 per cent, to 67,522. Overall annualized urban starts fell 5.1 per cent in September to 198,910.
Bank of Montreal senior economist Robert Kavcic said investment in residential construction seems grown again in the third quarter, after declining modestly in the second quarter.
“Canadian homebuilding activity remains robust, with the best population growth in 25 years proving fundamental support,” Kavcic wrote in a report.
CMHC’s trend measure, the six-month moving average of the overall monthly seasonally adjusted annual rates of housing starts, slipped to 214,821 in September compared with 220,573 in August.
In the Toronto region, CMHC said the pace of housing starts trended lower by seven per cent in September compared with August, led by a drop in apartment starts.
Meanwhile, Vancouver also trended lower as fewer multi-family home projects started work. CMHC said a record number of units under construction in the region have left little spare capacity to start additional projects.
The annual pace of rural starts were estimated at a seasonally adjusted annual rate of 18,208.
Statistics Canada also reported Tuesday that Canadian municipalities issued $7.5 billion worth of building permits in August, down 5.5 per cent from July.
Residential permits slipped 2.8 per cent to nearly $4.9 billion, while non-residential permits fell 10 per cent to roughly $2.7 billion.
Drivers such as population, income and employment have put downward pressure on new home construction activity. Total housing starts fell 34% in September compared to the prior year. Single-detached starts declined 33%, while multiple starts declined 42%.
Prince Edward Island (PEI)
Tightness in PEI’s resale sector continues to cause demand to spill over into the Island’s new home market. Starts of single-detached homes were up 93% year-to-date in September, with most of the activity concentrated in the Charlottetown area. Record high levels of international migration continue to support starts of multi-family dwellings, which were up 16% year-to-date.
In the third quarter of 2017, the annual rate of housing starts for the province overall reached 43,736 units, up from the level registered for the previous quarter (40,564 units). This last result, as were the relatively high totals for the previous quarters, was attributable to the strong momentum observed in the multi-unit housing segment, particularly in the case of rental apartments, for which starts remained significant in the Montréal and Québec areas. Given the strong activity observed so far, Quebec starts will likely post a gain in 2017.
Homebuilders broke ground on fewer homes in the Toronto Census Metropolitan Area (CMA) during September 2017. Total housing starts trended lower by 7% in September from the previous month led by lower apartment starts. Monthly variations in high-rise starts are typical given delays in getting large scale projects off the ground. Low-rise starts remained strong. The overall pace of new home construction remains stable as strong demand for new homes in the Toronto CMA continues to persist.
Single-detached starts were high in Brantford in September. New single-detached homes in Brantford were selling for $550,000 to $700,000 early this year, attracting the growing number of households from Hamilton and the GTA who could no longer afford detached homes in their markets.
Both single-detached and multiple housing starts in London CMA posted the highest levels for the month of September since 2006. Strong population growth and recent income gains have strengthened demand for new single-detached homes – encouraging builders to continue to keep single-detached starts elevated over recent months.
Total housing starts trended lower in September after production of both single-detached and multi-family units slowed. While the pace of construction in the singles sector has been on par with last year, multi-family construction was down 30% after nine months this year. Elevated inventory of completed and unsold condo apartments have remained a drag on this sector. All told, total year-to-date housing starts in September were down 13%, compared to the same period a year ago.
Housing starts in the Vancouver CMA trended downwards in September as fewer multi-family home projects got underway. The high level of housing starts over the past year has led to a record number of units being under construction in the region, leaving little spare capacity to start additional projects. New home construction in the Vancouver CMA is being supported by population growth, a strong local economy, and low financing costs.