The trend in housing starts was higher in September at 254,006 units, up 3.9% from 244,511 units in August, according to Canada Mortgage and Housing Corporation (CMHC). The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada.
Bob Dugan
The federal agency said the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada increased 8% in September (270,466 units) compared to August (250,383 units).
The monthly SAAR of total urban (centres 10,000 population and over) housing starts increased 9%, with 250,766 units recorded in September. Multi-unit urban starts increased 10% to 207,689 units, while single-detached urban starts increased 3% to 43,077 units in September, it said.
Total SAAR housing starts were up 98% in Montreal and 20% in Toronto in September, while Vancouver recorded a decrease of 17%, driven by declines in both single-detached (-12%) and multi-unit (-18%). The rural starts monthly SAAR estimate was 19,700 units, added the report.
“Both the SAAR and trend in housing starts were higher in September. Multi-unit starts activity has persisted and maintained similar levels to 2022 despite the higher interest rate environment. This has helped offset double-digit declines in single-detached starts in all provinces. In fact, September was the second highest month this year for multi-unit starts. It seems the current higher interest rate environment has not yet had the expected negative impact on multi-unit construction activity so far in 2023,” said Bob Dugan, CMHC’s Chief Economist.
Rishi Sondhi, Economist with TD Economics,said builders are facing pressures, with Monday’s Bank of Canada Business Outlook Survey noting that “increased interest rates and high construction costs are reducing the profitability of new developments”.
“Even with these challenges, they’ve been able to break ground on new homes at a very strong pace. Indeed, September’s robust report left starts running over 20% above pre-pandemic levels on a trend basis. For the third quarter overall, starts increased 4%, which will help support overall GDP growth through residential investment,” said Sondhi.
“Recent government actions, such as eliminating the GST on purpose-built rental buildings and changing zoning laws to allow more density should help support construction moving forward. That said, we still expect starts to cool through next year, as past declines in home sales filter through into homebuilding.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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