Ottawa housing market picks up steam in August

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The pace of new home construction in Ottawa increased last month, the country’s housing agency said late Thursday.

The Canada Mortgage Housing and Housing Corp. said the city’s builders kicked off construction on 508 new homes in August, up from 480 a year earlier.

There have been 3,088 housing starts so far in 2016, an improvement on the 2,930 new homes at the same time last year.

The increase is being driven by row houses and semi-detached homes, the CMHC reported.

The city’s homebuilding industry is coming off one of its slowest years in recent memory. The number of housing starts fell below 5,000 homes in 2015, the first time is dipped below that threshold in at least seven years.

The Conference Board of Canada says that “soft” pace of construction can be attributed to weaker demand for new homes caused by public-sector job cuts and a sluggish economy. However, the think tank predicted that residential construction activity would pick up in 2016 in line with a gradually improving economy.

The CMHC says most new home construction is taking place in Nepean, which includes the growing community of Barrhaven.

In addition to reporting actual housing starts, the CMHC also calculates an six-month rolling annualized average of seasonally adjusted rates.

This measurement also points to improvement in the city’s new home industry, with construction trending at an annualized rate of 4,869 units in August, up from 4,461 homes the previous month.

Nationally, the CMHC said the pace of housing construction slowed in August, mostly because of a decline in multi-unit projects.

The seasonally adjusted rate of housing starts last month was 182,703 units, down six per cent from 194,663 units in July. CMHC says the six-month trend – which smoothes out month-to-month variations – slipped by about three per cent to 195,640 units started in August from 201,379 units started in July.

The bulk of the decline was due to a drop in multiple-unit dwellings in urban areas, which fell by 7.3 per cent month-over-month to 111,378 units in August, on a seasonally adjusted basis.

There was a smaller decline in urban single-detached houses in August, which fell by 3.7 per cent month-over-month to 56,501 units, seasonally adjusted. CMHC says most of Canada's regions saw a decline in urban housing starts last month. Only Quebec showed an increase.

The agency officially released the monthly statistics on Thursday afternoon – ahead of schedule – due to a technical malfunction that published some of the information prematurely late Wednesday. The release was originally scheduled for Friday morning.

—With files from the Canadian Press