New Home Construction Up 14% in September from Previous Month, Says CMHC
Canada’s new home construction surged 14 per cent in September, marking a stronger-than-expected rebound led by multi-unit and rental housing projects, according to data from the Canada Mortgage and Housing Corporation (CMHC) released Thursday.
The seasonally adjusted annualized rate of housing starts climbed to 279,234 units, up from 244,543 units in August. Economists had forecast a smaller increase to around 255,000.
“The six-month trend in housing starts was pushed higher in September, driven by significantly higher monthly starts in Ontario, Quebec and the Prairie provinces,” said Tania Bourassa-Ochoa, CMHC’s deputy chief economist.
Major cities drive national increase
Toronto and Montreal together accounted for more than 25 per cent of the total monthly starts, largely due to a rise in rental apartment construction, CMHC said.
“While these results indicate some resilience, current housing start levels are reflective of decisions made months or even years ago when investor confidence was higher,” Bourassa-Ochoa added.
The annual pace of starts in urban centres (pop. 10,000 or greater) rose to 254,345 units, up 16 per cent from August’s 219,408, while rural starts were estimated at 24,889 units.
Economists see resilience despite challenges
Robert Kavcic, senior economist at BMO, said the latest figures show “continued resilience despite tough resale conditions.”
Over the past 12 months, housing starts have averaged 256,000 units nationwide, rebounding from earlier lows. However, Kavcic noted that Ontario’s average of 63,000 starts marks its lowest level in a decade.
“Rentals continue to drive housing starts, with activity in that segment now topping that for homeownership and condos combined,” Kavcic wrote in a client note.
The September spike highlights a construction sector still moving forward despite higher interest rates and tighter financing conditions — even as economists warn that future supply may soften amid weaker investor sentiment.
