OTTAWA — The pace of new housing starts in August climbed 1.9 per cent compared with July as the housing market rebounded from its recent slowdown.
Canada Mortgage and Housing Corp. said Tuesday the seasonally adjusted annual rate of housing starts rose to 226,639 units in August, up from 222,467 units in July.
Economists on average had expected an annual pace of 215,000, according to financial markets data firm Refinitiv, while the six-month moving average increased to 218,998 in August compared with 208,931 in July.
“August was yet another strong month for new construction, with broad-based gains registered across nearly all provinces,” TD Bank economist Rishi Sondhi wrote in a report.
“Moving forward, homebuilding is likely to remain strong through the remainder of this year, as solid demand fundamentals — namely low mortgage rates, healthy population growth and solid labour markets — underpin construction.”
The housing market cooled last year in the wake of tighter mortgage qualification rules and a rise in mortgage rates.
However, housing has started to regain strength this year as offers from lenders for fixed-rate mortgages have moved lower.
The increase in the annual pace of housing starts in August came as the pace of urban starts increased two per cent in August to 213,663 units.
Multiple-unit urban starts fell 1.4 per cent to 160,388 units in August while single-detached urban starts increased by 13.6 per cent to 53,275.
Rural starts were estimated at a seasonally adjusted annual rate of 12,976 units.
In a separate release, Statistics Canada said Tuesday that the value of building permits issued by Canadian municipalities rose three per cent to $8.3 billion in July, the latest numbers available.
The agency said the value of permits for multi-family dwellings rose 4.2 per cent to $2.8 billion in July, led by a gain in Ontario, while the value of permits for single-family homes edged down 0.2 per cent.
Robert Kavcic, senior economist at BMO Capital markets, said the construction side of the Canadian housing market still looks rock solid.
“This reflects strong demographic demand, both from international inflows and new households created within Canada,” Kavcic wrote.