Canadian Housing Starts Continue to Rise
OTTAWA - Canadian housing starts experienced a notable increase last month, driven by strong growth in the multi-unit sector. According to Canada Mortgage and Housing Corp., housing starts in September reached a seasonally adjusted annualized rate of 270,466 units, showing an impressive 8% rise compared to the previous month. This exceeded market expectations, as economists at TD Securities had forecasted 240,000 residential housing projects for the same period.
Multi-Family Units Lead the Way
The surge in housing starts was primarily fueled by a significant jump in urban multi-family units, including condominiums and row houses. The number of multi-family unit starts rose by 10% to reach 207,689 units, marking the second-highest level observed this year. Meanwhile, construction on single detached units also experienced growth, with a 3% increase to reach 43,077 units.
Regional Variations
Across Canada, Montreal saw a staggering 98% increase in housing starts for the month of September, followed by Toronto's healthy 20% rise. In contrast, Vancouver experienced a notable decline of 17%. This drop was attributed to decreases in both single-detached and multi-unit building activities.
Resilience in the Face of Higher Interest Rates
Despite concerns over higher interest rates negatively impacting construction activity, the data suggests that multi-unit construction remains resilient in 2023. According to Bob Dugan, the chief economist for Canada's national housing agency, the anticipated negative impact has yet to materialize.
The Overall Trend
When considering the trend measure, which is a six-month moving average of the monthly seasonally adjusted annual rate of housing starts, September showed a positive trend. The trend measure increased by 3.9% to reach 254,006 units.
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