Apartments driving Ottawa homebuilding rebound: CMHC

Apartment
Stock image, for illustrative purposes only.

A slowdown in new home construction last month failed to put much of a dent in what is closing out to be a banner year for Ottawa homebuilders.

Local developers started work on 529 new homes in October, down from 604 a year earlier, the Canada Mortgage and Housing Corp. reported this week.

But total Ottawa housing starts through the first 10 months of this year are up 29 per cent to 5,698 homes. That’s up from 4,405 homes during the same time period in 2016.

“The rise in starts so far this year was mostly driven by a doubling in apartment starts following three years of declining high-rise construction ... as the number of completed and unsold condominiums has trended down considerably since peaking in mid-2016,” the CMHC says.

Nationally, the annual rate of housing starts ticked higher in October as the pace of new construction in the Vancouver region hit a 12-month high.

The overall increase in home starts comes even as the resale market for homes has been slowing this year compared with the fever pitch in the spring.

“We continue to expect a moderation in starts at the national level over the next year that would be more in keeping with what we are seeing on the resale side,” Royal Bank economist Josh Nye wrote in the report.

“The combination of policy changes, including measures set to go into effect in January, and rising interest rates is expected to result in a sustained cooling in existing home sales and less price pressure.”

– With reporting by the Canadian Press