Canadian housing starts continued with their momentum in August, coming in at 226.6k units. This pace surpassed market expectations of 212.5k print. On a sequential basis, starts rose 1.9 percent. Single-detached starts recorded a rise of 11.4 percent gain in the month. Markedly, they have come off the lows observed earlier in the year. On the contrary, multi-unit starts fell 1.4 percent to 163.7k units, although the level remained elevated.
Ontario drove the monthly rise, where starts rose 13.1k units to 83.5k. Nevertheless, starts were also higher across the Atlantic Provinces and the Prairies. In B.C., starts dropped 26 percent to 39.3k units after being inflated in prior months as builders pulled-forward activity to get ahead of a new development charge in Vancouver.
So far in the third quarter, starts are averaging a strong 224.6k rate, slightly above second quarter’s rate. Combined with a possible rise in home sales, this implies a healthy quarter is in store for residential investment in the third quarter, said TD Economics.
“Moving forward, homebuilding is likely to remain strong through the remainder of this year, as solid demand fundamentals – namely low mortgage rates, healthy population growth and solid labour markets – underpin construction. This is consistent with the trend in building permits, which remain elevated and were reported this morning to have increased month-on-month in July”, added TD Economics.