Canada: Housing starts surge August
September 9, 2020
Housing starts increased to 262,387 units on a seasonally-adjusted annualized rate (SAAR) basis in August—the highest reading since September 2007—according to the Canada Mortgage and Housing Corporation (CMHC), up from July’s 245,426-unit reading. August’s jump was driven by a healthy increase in multi-units, while single-detached urban starts fell slightly.
Meanwhile, the six-month average of housing starts in urban areas increased to 213,142 units in August from 204,597 units in July. Commenting on August’s housing starts report, Rishi Sondhi an economist at TD Economics, noted:
“The robust pace of homebuilding is being driven by past sales gains, with low interest rates also providing support. These factors should keep homebuilding elevated through next year as well […] While we wouldn't quite call a report like this mixed, the gain in starts was almost entirely driven by multi-family construction in Ontario, which is likely to pull back significantly from this multi-decade high in coming months. What's more, building permits softened in July, portending some easing in the pace of homebuilding in the short-term. Over the medium-term, the prospect of slower population growth could weigh on homebuilding.”
Author: Steven Burke, Economist