Housing starts nationwide climbed by almost 16% monthly in July, significantly outstripping economists’ predictions, according to latest data from the Canada Mortgage and Housing Corporation.
On a seasonally adjusted basis, the annual rate of housing starts increased from 212,095 in June to 245,604 in July. Refinitiv’s earlier polling of economists has pegged the July annual rate at 210,000.
Multiple-unit housing urban starts – including apartments, condos, and others – went up by 18.8% to reach 184,431 in July.Single-detached urban starts saw a 12.3% monthly gain to 47,564.
“Housing starts continue to rebound nicely. Strong underlying demand and low rates mean builders likely won't be packing away those hammers any time soon,” said Priscilla Thiagamoorthy,economist at BMO Capital Markets.
Even the coronavirus pandemic did not seem to have a significant impact, as the six-month moving average of starts went up from 199,778 in June to 204,376 in July.
“Aside from the complete pause in Quebec in April due to restrictions on non-essential economic activity, homebuilding has shown only a muted response to COVID-19, swiftly returning to pre-pandemic levels,” said Omar Abdelrahman, economist at TD Economics.
COVID-19’s lingering presence will likely contribute to more sedate homebuilding in the next few months, however.
“Despite the housing market’s durability thus far, we continue to see a soft spot ahead given the ongoing lack of immigration and upcoming resumption of many deferred mortgages,” said Royce Mendes, executive director and senior economist at CIBC Economics. “Furthermore, interest from investors for short-term rental condo units in downtown cores has come under severe pressure just as demand dynamics are shifting toward a desire for suburban homes with more space and backyards.”