Canada Housing August 2019

Canada

Canada: Housing starts recover robustly in August

September 10, 2019

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.”  

In its annual Housing Market Outlook released in October, the CMHC projected housing starts would range between 193,700–204,500 units in 2019 and between 189,300–201,300 units in 2020. FocusEconomics Consensus Forecast participants, meanwhile, expect 202,700 housing starts in 2019, before moderating to 195,500 units in 2020.


Author:, Economist

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Canada Housing Starts August 2019

Note: Monthly housing starts and six-month trend in monthly housing starts, both at seasonally-adjusted annualized rate.
Source: Canada Mortgage and Housing Corporation (CMHC).


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