Overall pace remains well below required levels
Housing starts in Canada increased in September compared with the prior months, although at a slower pace than economists had predicted.
Canada Mortgage and Housing Corporation (CMHC), the national housing agency, said on Wednesday that starts were up by 5% last month compared with August, hitting a seasonally adjusted annualized clip of 223,808 units – lower than economists’ expectations of 237,500.
Multi-unit and single-family detached urban home construction accelerated in September and served as one of the main contributors to the stronger month-over-month performance, according to CMHC.
The latest figures mark a rebound of sorts for Canada housing starts after construction slowed to a revised pace of 213,012 units in August, although groundbreaking remains well below the levels CMHC has identified as necessary to restore housing affordability by 2030.
🏡📊 The six-month trend in #HousingStarts declined by 1.9% in September to 243,759 units compared to August’s 246,972 units.
— CMHC (@CMHC_ca) October 16, 2024
Despite this, September saw a 5% rise in total monthly SAAR of housing starts to 223,808 units.
Let’s break down the data in more detail. (a🧵)
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The agency estimates about 3.5 million additional housing units required by that year to ensure every Canadian can afford a home, with Ontario and British Columbia in particular requiring a significant uptick in construction to improve the grim affordability outlook in those provinces.
High interest rates and borrowing costs have weighed substantially on homebuilder sentiment. The Canadian Home Builders’ Association (CHBA) revealed in August that its Housing Market Index (HMI), a gauge of homebuilders’ optimism towards the market, plunged in the second quarter of the year.
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