The Canada Mortgage and Housing Corporation (CMHC) announced that the annual pace of housing starts increased by 16 per cent in July compared to June.
The national housing agency said the seasonally adjusted annual rate of housing starts in Canada for July was 279,509 units, up from 241,643 in June.
“Builders began building a larger-than-expected number of units in July, with Ontario posting its best month in more than a year,” TD Bank economist Maria Solovieva wrote in a report.
However, Mme Solovieva noted that despite the rebound, housing starts remain below multi-decade highs seen in 2021 and 2022, particularly in single-family and semi-detached units.
“We expect multifamily units to contribute to a decline soon, given low pre-sale activity in recent years and high borrowing and construction costs,” she wrote.
The supply of affordable housing is a key policy issue. All levels of government have tried to do what they can to help stimulate the construction of new housing.
The housing starts report follows figures from the Canadian Real Estate Association released Thursday, which showed that while home sales in July were up 4.8 per cent from a year ago, on a seasonally adjusted basis they were down 0.7 per cent from June 2024.
Residential construction activity remains robust in Canada despite the obvious slowdown in the resale market, according to Robert Kavcic, BMO’s senior economist.
“The fact that such a cyclical component of the economy has not buckled under significantly higher borrowing costs suggests that more structural forces still at play are outweighing some areas of weakness,” Kavcic wrote in a report.
The increase came as the annual pace of urban housing starts increased 17% to 261,134 units for the month.
The annual rate of urban multi-family housing starts increased 21% to 217,306 units in July, while the pace of urban single-family housing starts increased 2% to 43,828 units.
The annual rate of housing starts in rural areas was estimated at 18,375 units for the month.
CMHC reported that the six-month moving average of the seasonally adjusted annual rate of housing starts in Canada increased 3.2 per cent to 255,783 units in July from 247,840 in June.