September a strong month for housing starts

September was a prolific month for multi-unit home construction in Red Deer, based on the latest report from Canada Mortgage and Housing Corp.

September was a prolific month for multi-unit home construction in Red Deer, based on the latest report from Canada Mortgage and Housing Corp.

The national housing agency said on Wednesday that work began on 93 units in multi-family projects during the month, up from eight in August and 18 in September 2013.

Meanwhile, starts on single-detached houses last month numbered 23, as compared with 35 in August and 29 a year ago.

On the strength of the multi-unit numbers, total housing starts in Red Deer in September were 116, up 170 per cent from the 43 in August and 147 per cent from the 47 starts 12 months earlier.

Three-quarters of the way through 2014, housing starts in Red Deer had reached 680, with 280 of these single-detached projects and 400 units in multi-family buildings. That tally was a 20 per cent improvement over the figure to the same point in 2013, when there had been 294 starts on single-detached houses and 272 on multi-family homes for a total of 566.

Elsewhere in Central Alberta, housing starts in Sylvan Lake during the January-to-September period this year reached 177, with 92 of these single-detached homes and 85 multi-family. That compares with 186 at the nine-month point of last year, when there had been 97 single-detached and 89 multi-family starts.

Lacombe recorded 49 starts during this same period, including 30 single-detached and 19 multi-family projects. That figure was down from the same nine months in 2013, when there were 75 starts: 56 single-detached and 19-multi-family.

Among Alberta’s seven largest urban centres, total housing starts were up this year in all but the Regional Municipality of Wood Buffalo.

Canadawide, the pace of housing starts picked up slightly in September as work began on more multi-unit dwellings, including condominiums, said CMHC. It calculated that there were 17,343 actual starts in September, which if extrapolated over 12 months, would produce a seasonally adjusted annual rate of 197,343 starts — up from 196,283 in August.

CMHC’s six-month moving average increased to 197,747 units in September, compared with 191,095 in August.

“The increase in the trend reflects stronger starts activity since April, largely concentrated in multi-unit dwellings including condominiums,” CMHC chief economist Bob Dugan said in a statement.

“However, the currently elevated level of condominium units under construction supports our view that condominium starts should trend lower over the coming months.”

The housing starts data followed a report Tuesday by Statistics Canada that the value of building permits issued by municipalities plunged 27.3 per cent in August, far more than the 12.5 per cent drop that economists had expected, according to Thomson Reuters.

BMO Capital Markets senior economist Robert Kavcic noted that Canadian housing starts appears to have hit a ceiling at the 200,000 level.

“This will let policy-makers breathe easier, and suggests that overall building activity in Canada remains within the range required to satisfy demographic demand,” Kavcic wrote in a note to clients.

However, he noted that there are plenty of regional differences.

Alberta remains hot, noted Kavcic, while Manitoba and Saskatchewan appear to be cooling and Atlantic Canada remains cool.

CMHC said the seasonally adjusted annual rate of urban starts in September decreased in British Columbia and Atlantic Canada and increased in Quebec, Ontario and the Prairies.

The housing market has been closely watched by policy-makers and economists for signs weakness with household debt cited as a key risk to the financial system and the economy.

Ottawa has moved four times since 2008 to tighten mortgage lending rules in an effort to keep spending under control.

With files from The Canadian Press.

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