Housing starts slide in September: CHMC

Housing starts
Housing starts

The summer slowdown in local housing starts stretched into the beginning of fall, the Canada Mortgage and Housing Corp. said Monday, with the number of new builds down nine per cent in September compared with a year earlier.

Developers in Ottawa-Gatineau started work on 1,400 new homes last month, down from 1,540 in September 2020, according to CMHC. Apartments, condos and other types of multi-unit projects showed the biggest drop, with starts declining 15 per cent year-over-year.

It’s the fourth month in a row that housing starts in the region were behind their pace from 2020.

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Still, there was a significant disparity in construction activity on the two sides of the Ottawa River. While overall housing starts in Ottawa fell 29 per cent in September to 788, new builds in Gatineau were up 44 per cent year-over-year to 612.

Meanwhile, the region’s annual pace of housing starts – a rolling average designed to smooth out monthly fluctuations – jumped considerably last month.

The housing agency said the seasonally adjusted annual rate of new builds in Ottawa-Gatineau was 15,678, a 47 per cent increase from July.

National pace slows

Nationally, the annual pace of housing starts in September fell compared with August as they continued to slow from their highs reached earlier this year.

CMHC said the seasonally adjusted annual rate of housing starts last month was 251,151 units, down 4.4 per cent from 262,754 in August.

CIBC senior economist Royce Mendes said the slowdown was roughly in line with expectations.

“While that’s well off the peaks seen earlier this year, it’s still stronger than the pre-COVID trend of just above 200,000,” Mendes wrote in a note to clients.

“Demand for housing in Canada remains strong, but permits have been slowing lately, potentially due to supply constraints for both labour and materials.”

The drop in September came as the annual pace of urban starts fell 4.5 per cent to 223,055.

The annual rate of urban starts for apartments, condos and other types of multiple-unit housing projects dropped four per cent to 165,861, while the rate of single-detached urban starts fell 5.9 per cent to 57,194 units.

CMHC estimated rural starts at a seasonally adjusted annual rate of 28,096 units.

The six-month moving average of the monthly seasonally adjusted annual rate of housing starts was 271,068 in September, down from 284,757 in August.

Last week, the Canadian Real Estate Association reported September home sales edged up on a month-over-month basis for the first time since March.

The association said Friday that home sales for the month amounted to 48,949, their second-highest ever for September and a 0.9 per cent increase from 48,498 in August.

However, sales were down 17.5 per cent from September 2020, when a record was reached for the month.

– With additional reporting from the Canadian Press

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