The number of new homes under construction in Ottawa hit a four-month high in September as local developers showed few signs of slowing the pace of building, the Canada Mortgage and Housing Corp. reported this week.
The pace of new housing starts also reached the highest level in at least four months. The six-month moving average of the overall monthly seasonally adjusted annual rates of housing starts in the nation’s capital reached 7,187 in September, up from 6,539 the previous month.
In actual terms, homebuilders broke ground on 678 new units in September. That’s up from 618 in August, but down from 713 in September 2016.
Through the first three quarters of the year, housing starts increased a whopping 36 per cent from 3,801 homes in 2016 to 5,169 this year.
Local industry officials have previously credited improving consumer confidence, driven by stability in the public service, for the uptick in development. Cost-cutting efforts by the previous Conservative government caused economic growth to slow in Ottawa-Gatineau and prompted many residents to put off major purchases, such as a new home.
So far, homebuilders appear to be reading the local market correctly, with few finished homes sitting unsold. Year-to-date completions are up more than four per cent, but the number of new homes completed but not yet absorbed by the market has remained steady for the past for months and stood at 106 properties in September.
Nationally, the pace of housing starts in Canada slowed in September compared with August, but stayed over 200,000 for the fourth month in a row.
CMHC said the seasonally adjusted annual rate of housing starts slipped to 217,118 units in September, down from 225,918 units in August.
The pace of multi-unit urban starts – condos, apartment buildings and the like – dropped 10.7 per cent to 131,388. That more than offset an increase in single-detached urban starts, which climbed 8.2 per cent, to 67,522. Overall annualized urban starts fell 5.1 per cent in September to 198,910.
Bank of Montreal senior economist Robert Kavcic said investment in residential construction seems grown again in the third quarter, after declining modestly in the second quarter.
“Canadian homebuilding activity remains robust, with the best population growth in 25 years proving fundamental support,” Kavcic wrote in a report.
CMHC's trend measure, the six-month moving average of the overall monthly seasonally adjusted annual rates of housing starts, slipped to 214,821 in September compared with 220,573 in August.
In the Toronto region, CMHC said the pace of housing starts trended lower by seven per cent in September compared with August, led by a drop in apartment starts.
Meanwhile, Vancouver also trended lower as fewer multi-family home projects started work. CMHC said a record number of units under construction in the region have left little spare capacity to start additional projects.
The annual pace of rural starts were estimated at a seasonally adjusted annual rate of 18,208.
- With reporting by the Canadian Press