Canadian homebuilding stays sound in November, housing starts rise 0.3 pct

Canada’s homebuilding stayed healthy in November, with starts coming in at 201.3k units. On a sequential basis, housing starts rose 0.3 percent sequentially in the month. Single-detached starts dropped 4 percent to 56.3k units. Still, single-detached construction continues be off the multi-year lows observed earlier in 2019. On the contrary, multi-family construction rose 2 percent to 145.0k units and remains elevated on a trend basis.

The modest monthly gain was driven by B.C. where starts rose by 14.2k to 48.8k units. Starts also came in higher in Alberta, continuing their rebound from the depressed levels seen in early 2019. Starts also rose in most of the Atlantic Provinces, driving a 2.6k unit gain for the region overall.

On the other hand, starts fell in Quebec after a solid October rise. Homebuilding also fell in Ontario to its lowest level since February. The multi-family segment in Toronto drove Ontario’s fall, likely in a sign that past falls in condo pre-sales are feeding through into construction. Starts also fell in Manitoba and Saskatchewan.

Housing starts in Canada maintained their healthy momentum in the month, remaining above the 200k mark for the sixth consecutive month. Nevertheless, it is worth noting that starts have eased from their very strong third quarter rate, noted TD Economics in a research report.

“Homebuilding was solid last month, buoyed by robust population growth and relatively low interest rates. Alongside a probable pick up in November home sales (due out next week), the starts report is consistent with our call for residential investment to make an important contribution economic growth again in the fourth quarter”, added TD Economics.