A flurry of new multi-unit builds in Ottawa fuelled a spike in September housing starts, according to new data from the Canada Mortgage and Housing Corp.
Homebuilders started work on 1,289 new units in Ottawa last month, up 113 per cent from September 2018, the agency said Tuesday. While the single-detached building category remained fairly consistent year-over-year, a 201 per cent spike in apartment, townhome and other multi-unit builds saw work start on 1,013 units last month.
The swing comes after the multi-residential category was down slightly last September, a dip some observers attributed to a perceived oversupply in the market at the time.
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CMHC said the growth in single-detached home prices is pushing demand towards less expensive housing types such as condos and row homes.
On the other side of the Ottawa River, Gatineau saw its multi-residential starts rise 42 per cent year-over-year to 182 new builds in September. In total, Ottawa-Gatineau saw 1,531 housing starts in September, an increase of 93 per cent from the year before.
CMHC said housing starts are up 11 per cent year-to-date in Ottawa, putting the capital on track for its biggest year in at least a decade.
Nationally, the pace of Canadian housing starts slowed in September compared with August, but still came in better than expected.
CMHC said the seasonally adjusted annual rate fell 2.5 per cent month-over-month to 221,202 units in September compared with 226,871 in August.
However, economists on average had expected an annual pace of 214,500 for September, according to financial markets data firm Refinitiv.
“This continues to reflect strong demographic demand, both from international inflows and new households created within Canada,” said Robert Kavcic, a senior economist at Bank of Montreal.
“There’s a lot of homebuilding activity going on across the vast majority of Canada.”
The overall decrease in the rate of housing starts last month came as the pace of urban starts fell 2.4 per cent to 208,503 units.
Urban starts of apartment, condo and other types of multiple-unit housing projects dipped 0.2 per cent to 159,742, while starts of single-detached urban homes fell 9.2 per cent to 48,761 units.
Rural starts were estimated at a seasonally adjusted annual rate of 12,699 units.
The six-month moving average of the monthly seasonally adjusted annual rate of housing starts was 223,507 in September, up from 218,782 in August.
The CMHC’s monthly report follows industry figures that show home sales have been stronger than last year and stronger than the early months of 2019.
Last month, the Canadian Real Estate Association raised its 2019 forecast sales of existing homes to 482,000 units, up five per cent from 2018.
“Canada’s housing sector is back on the front foot with resales picking up as the year progresses and homebuilding activity clearly displaying some momentum,” Josh Nye, a senior economist at Royal Bank, said Tuesday.
“Ontario, the Prairies and Atlantic Canada are on the rebound while the trend in B.C. and Quebec remains strong despite slower starts in the last month or two.”
– With files from Canadian Press