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Canada Mortgage and Housing Corp. says the annual pace of housing starts ticked higher in October, boosted by construction of multi-unit homes.

The housing agency says housing starts for the month came in at a seasonally adjusted annual rate of 222,771 units in October, up from 219,293 units in September.

The annualized pace of urban starts increased by 2.5% in October to 205,935 units, boosted by a 12.5% jump in multiple urban starts to 149,593.

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“New home construction activity exceeded expectations for the fifth month in a row,” says Derek Holt, vice-president and head of capital markets economics at Scotiabank, in a report.

Single-detached urban starts fell 17.1% to 56,342 units.

“In Vancouver, singles fell 15% [month-over-month], while multis were up 136%. Yes 136%,” says Holt.

Rural starts were estimated at a seasonally adjusted annual rate of 16,836 units.

For the quarter as a whole, “starts were up by 34% [quarter-over-quarter] at a seasonally adjusted and annualized rate,” says Holt. “That reverses a 26% [quarter-over-quarter] slide in Q2.”

He adds: “Q3 urban singles were up 3.5% [quarter-over-quarter] while urban multiples were up 56.5%. That’s a positive for residential construction in the GDP accounts.”

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 216,770 units in October, up from 215,153 units in September.

By province, gains in B.C. and Quebec offset a large decline in Ontario, while Alberta was flat, says Holt. The biggest monthly gain was in Saskatchewan, followed by B.C. and Quebec. Nova Scotia posted the weakest monthly gain.

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“All told, the run up in starts through 2017 is a positive omen for residential investment, although already elevated levels of activity mean that there isn’t much room for housing to become more of a positive for the growth outlook,” says Nick Exarhos, director at CIBC World Markets, in a note.

Read the full Scotiabank report.

Also read:

Commercial real estate in Toronto to heat up

Originally published on Advisor.ca
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