Canada's home building steams ahead

OTTAWA — Home construction rose more than expected in September, led by multiple-units activity, according to Canada Mortgage and Housing Corp.

CMHCsaid Tuesday that housing starts totalled a seasonally adjusted 205,900 units during the month, following an upwardly revised 191,900 units in August.

“Housing starts picked up in September due to an increase in multiple starts in the Atlantic region, Quebec and in British Columbia,” said Mathieu Laberge, CMHC’s deputy chief economist. “Multiple housing starts are expected to move back towards levels consistent with demographic fundamentals in the near term.”

The seasonally adjusted annual rate of urban starts rose 8% to 185,900 units in September. Multiple-unit urban starts jumped 14.2% to 118,000 units, while urban single-unit construction fell 1.5% to 67,900 units.

Rural starts edged up to 20,000 units from 19,700 in August.

Economists had forecast overall housing starts of about 190,000 in September.

“With single starts declining mildly, multiple starts were the main driver for the increase in home building activity, although this category is widely expected to scale down in the months ahead,” said CIBC World Markets economist Emanuella Enenajor.

“The data suggest that residential construction could be a plus for GDP in Q3 as home building continues to garner support from a low rate environment, and a robust multiples market.”

Economist Robert Kavcic, at BMO Capital Markets, said the housing market “continues to hold up well in Canada, helped by extremely low interest rates and a solid, though cooling, labour market.”