Canada: Housing starts recover robustly in August
Housing starts increased to 226,639 units on a seasonally-adjusted annualized rate (SAAR) basis in August, according to the Canada Mortgage and Housing Corporation (CMHC), up from July’s downwardly revised 222,467-unit reading (previously reported: 222,013) and smashing analysts’ expectations of a 215,000 print. August’s jump was driven by a healthy rise in multiple-urban detached starts, while single-detached urban starts surged 13.6% on a seasonally-adjusted annualized rate (SAAR) basis in August.
Meanwhile, the six-month average of housing starts on a SAAR basis rose to 218,998 units in August from 208,931 units in July. Going forward, healthy labor dynamics, relatively low mortgage rates and fiscal stimulus supporting first-time home buyers— that will come into effect in October—should continue to power the construction sector.
Commenting on August’s print, Rishi Sondhi, an economist at TD Economics, noted:
“Canadian homebuilding simply won’t quit. August was yet another strong month for new construction, with broad-based gains registered across nearly all Provinces [..] So far in the third quarter, starts are averaging a robust 224.6k rate, slightly above Q2’s pace. Combined with a probable rise in home sales, this suggests a healthy quarter is in store for residential investment in Q3.”