New housing starts cool in October on fewer condo builds
The pace of new home construction declined slightly in October compared to the month before in part because of a slowdown in new condominium construction.
The Canada Mortgage and Housing Corporation said Monday the annual pace of new housing starts was 195,707 units in October. That compares to 197,763 in September.
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"The decrease in the trend reflects a decline, in October, of starts of multi-unit dwellings, including condominiums," CMHC economist Bob Dugan said. "Given the elevated level of condominium units under construction, our expectation is that condominium starts will continue to trend lower over the coming months."
Condominiums are tabulated in the category the CMHC calls "multiple-urban starts" which fell to 98,673 during the month. For comparison purposes, September's figure was almost 115,000.
"Construction starts have run at strong levels for years, and moreover, the wave of condo supply (oversupply?) in Toronto, Vancouver, and Montreal has to eventually weigh on construction," Scotiabank said in a research note ahead of the release of the numbers.
Economists had been expecting the overall figure to come in at around 200,000. But the weakness in condos dragged the total lower.
Single-family homes stay strong
Indeed, almost all of the decline came from condos. Detached single family homes, long considered the heart of the housing market, actually increased to 66,010 from 62,514.
Scotiabank cautioned, however, not to read too much into the monthly data, as construction is very seasonal, so slight changes in rates this time of year tend to get extrapolated into a disproportionately large trend. "Small differences in absolute quantities of starts are magnified by the adjustment of the data," the bank said
By region, the pace of urban housing starts in October decreased everywhere across the country, with declines led by British Columbia and followed by Quebec, Atlantic Canada, the Prairies and Ontario.