“While the Bank of Canada has household imbalances on the watch list of risks to financial stability, there still doesn’t appear to be much overbuilding to worry about—and that goes for Canada’s three hottest cities as well,” Robert Kavcic, senior economist for BMO Financial Group wrote in his latest Canadian housing starts report.
Canadian housing starts jumped to 195,600 annualized units in November, a slight revision from the 183,700 reported in October.
According to Kavcic, the number of homes being built – bolstered by multi-unit starts -- is in line with demographic demands.
“Multi-unit starts accounted for all of the rebound in November, rising to 112.6k from 99.1k in the prior month, while singles edged down to 63.8k,” Kavcic wrote. “Through November, multis have averaged 111k versus just 62k for singles, and the gap for all of 2014 figures to be the 2nd largest since at least 1990 (it was slightly wider in 2012).”
Four provinces accounted for the increase in activity – led by Ontario, Quebec and British Columbia. Alberta, meanwhile, may see a decrease in homebuilding for the time being as oil prices continue to slide.
As for the Canada’s two hottest cities, Kavcic says they remain “well behaved.”
“Vancouver starts are holding remarkably steady, averaging 19k through November, a trend that has held for roughly 3 years,” he wrote. “Toronto starts have slowed considerably in the past year, with the year-to-date average now sitting at 29k, which would mark the lowest annual total since the recession in 2009 (or 1998 prior to that).”
The number of housing starts have continued to surge toward the end of the year but one big bank economist assures Canadians we aren’t at risk of overbuilding.