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

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.

Just Posted

(File photo)
Poverty reduction survey identifies 10 poverty themes

Poverty reduction plan will be finalized in July 2021

Nanaimo-Ladysmith MP Paul Manly says he has no intentions of leaving the Green Party. (House of Commons image)
Island Green MPs have “no intention” of leaving the party after ‘heartbreaking’ departure

Manly, May only remaining Green MPs after Jenica Atwin left for the Liberals over internal disputes

New COVID-19 cases on Vancouver Island by local health area for the week of May 30-June 5. (B.C. Centre for Disease Control image)
COVID-19 cases drop again almost everywhere on Vancouver Island

Nanaimo had four new cases last week, down from 22 the week before

Justine Keefer’s Cedar Elementary School Grade 6/7 class put together a student paper, as part of a school project. Pictured here Andrew Gregory, left, Felix Leduc, Addison Armstrong, Lucia Walker and Anise Dick. (Karl Yu/News Bulletin)
Cedar Elementary School students create their own newspaper

Grade 6/7 class publishes Wolf Pack News as part of language arts and social studies

Évangeline Laforest and Oscar McClements’ invention La Méduse (the Jellyfish) removes oil from the ocean. The invention was one of 15 out of 700 inventions submitted to the Natural Sciences and Engineering Research Council of Canada’s Little Inventors contest. (Cole Schisler photo)
‘Little Inventors’ from Ladysmith showcased in national science challenge

Évangeline Laforest and Oscar McClements were one of 15 finalists in the Little Inventors Challenge

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

Most Read