New home construction takes place in a development in Oakville, Ont., on Thursday, Aug. 15, 2019. THE CANADIAN PRESS/Nathan Denette

Canadian homebuilding remains strong despite 20% drop in September, say economists

Economists had expected an annual rate of 240,000 starts in September

Canada’s homebuilding activity remained historically strong last month even though the annual pace of starts plunged 20 per cent from August, economists said Thursday.

Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts was 208,980 units in September, down from 261,547 units in August but in line with average readings in 2019.

Economists had expected an annual rate of 240,000 starts in September, according to financial markets data firm Refinitiv.

The decrease was driven by weakness in Ontario and British Columbia and lower starts in condos.

However, the six-month moving average of the monthly seasonally adjusted annual rates of housing starts rose slightly to 214,647 in September, up from 212,609 in August.

“The national trend in housing starts was largely unchanged in September,” said Bob Dugan, CMHC’s chief economist.

COVID-19 has resulted in volatility in multi-family starts, especially in Toronto.

“We expect national starts to trend lower by the end of 2020 as a result of the negative impact of COVID-19 on economic and housing indicators,” he said in a news release.

Broader demand trends remain resilient in the near-term with the level of starts remaining strong by historical standards, said RBC economist Claire Fan.

“Average starts from January to September were one per cent above the same period in 2019 — despite COVID-19 containment measures that shut down wide swaths of the economy in the spring,” she wrote in a report.

“And in Quebec and Ontario, average starts continued to outpace the national comparable while the others, most notably BC, lagged.”

Fan noted that the issuance of permits has remained strong, “suggesting still-solid momentum for housing starts in the near-term.”

Housing starts averaged 237,300 units in the third quarter, up 22.2 per cent from 194,100 units in the second quarter.

“Moving forward, past pre-construction sales gains and low rates should ensure that starts remain elevated through next year,” TD economist Rishi Sondhi wrote.

“Afterwards, some slowing may take place as softer population growth brought upon by the pandemic weighs on housing demand, and ultimately, homebuilding.”

The annual pace of urban starts fell 21.1 per cent in September to 195,909 with starts down in eight of 10 provinces:

Housing starts in Ontario fell by nearly 37,000 units to 78,700 while activity in B.C. fell by 10,900 units to 30,700 units.

Homebuilding activity in Quebec dropped by 7,500 to 48,000 units.

Alberta drove higher starts in the Prairie region where urban starts climbed by 5,700 to 24,800 units, offsetting losses in Saskatchewan and Manitoba.

Starts in Atlantic Canada slipped with declines in every province but Nova Scotia.

The pace of urban starts of apartments, condos and other types of multiple-unit housing projects decreased 27 per cent to 146,005 units, while single-detached urban starts increased 3.4 per cent to 49,904.

Rural starts were estimated at a seasonally adjusted annual rate of 13,071 units.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Scott Stevens, left, with Robert Askeland at Rich’s Saw Sales. (Aman Parhar/Omineca Express)
Rich’s Saw Sales: Multi-faceted store specializing in light industrial, home and garden

As a part of small business week, the Express is featuring local Vanderhoof businesses

(Aman Parhar/Omineca Express)
Vanderhoof Department Store: 28 years of exceptional and personal retail experience

As a part of small business week, the Express is featuring local Vanderhoof businesses

Richard Wruth, owner of California Dreamin’. (Aman Parhar/Omineca Express)
California Dreamin’: One-stop-shop for all your clothing needs

As a part of small business week, the Express is featuring local Vanderhoof businesses

Pictured- Mayson Williams, Michael Williams, Josie Williams, Tyreed Schumann, Alison Eggleton, Abby Doiron, Jason Schumann, Charity Schumann, Annabelle Lyons, Carlina and Daniel Lyons. (Submitted photo)
Daniel Lyons Law Corp: Your local, community legal counsel

As a part of small business week, the Express is featuring local Vanderhoof businesses

Tasty Tandoori Grill Restaurant. (Submitted photo)
Tasty Tandoori: Celebrating Indian cuisine in northern B.C.

As a part of small business week, the Express is featuring local Vanderhoof businesses

Provincial health officer Dr. Bonnie Henry presents modelling of COVID-19 spread in B.C., March 25, 2020. (B.C. government photo)
B.C. sets another COVID-19 record with 203 new cases

up to 1,766 active cases in B.C., two more deaths

More and more electric cars are on the road, but one Chevy Bolt owner was shocked to see how much his BC Hydro bill skyrocketed once he started charging the vehicle. (Black Press file photo)
Lower Mainland man sees significant spike in BC Hydro bill after buying electrical vehicle

An increase should be expected, but Brian Chwiendacz experienced a 200-plus per cent hike

The Anonymous YVR is an Instagram page that reviews restaurants and other establishments around B.C. based on how well they adhere to COVID-19 rules. (Instagram)
Anonymous Instagram page reviews COVID-19 safety measures at B.C. businesses

There are a number of public health orders various types of establishments must follow to slow virus’s spread

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Jordan Naterer, an electrical engineer from Vancouver, was last seen Saturday Oct. 10. (Facebook photo)
Search efforts to resume for missing Manning Park hiker; Trudeau speaks on case

PM says he’ll do what he can to ‘nudge’ efforts to find Jordan Naterer, yet has little leverage locally

Smartphone showing various applications to social media services and Google. (Pixabay photo)
National media calling for level playing field with Google, Facebook

In Canada, Google and Facebook control 80 per cent of all online advertising revenues

École de L’Anse-au-sable. (Google Maps)
B.C. records first COVID-19 outbreak at school, six weeks after students return to class

Three cases of the virus have been identified at École de L’Anse-au-sable

Most Read