The Canada Mortgage and Housing Corp. says the pace of housing starts picked up in November, pushing the six-month trend to the highest level in nearly a decade.
The Ottawa-based Crown corporation says construction of multiple-unit projects in Toronto has been a driving force behind the trend.
In November, the seasonally adjusted annualized rate of housing starts across Canada was 252,184 units—up from 222,695 units in October.
Multiple-unit urban starts accounted for 175,016 units, up 16.9%, while single-detached urban starts were up 7.5% to 60,396 units and rural starts were estimated at 16,772.
CMHC’s six-month housing starts trend rose to 226,270 units in November, from 216,642 units in October.
In a research note, CIBC Capital Markets chief economist Avery Shenfeld says the news isn’t as much of a surprise as some 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. Multiples starts were up 17% from October, with singles up 6%.”
Another reason for the surprise, he adds, could be the “seasonally mild weather in much of the country, with Ontario starts up 66% from the prior month, but less-weather-affected permits had already been running fairly strong.”
Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank, is cautious on Ontario for now. “I would remain cautious toward the multiples surge in Ontario,” he says in a Dec. 8 report. “Given project lags, the numbers we’re seeing reflect decisions that pre-date rent control changes in April that many feel will sharply diminish investor appetite for such units (and already is with lagged effects on construction).”