Housing starts jump in November, CMHC says

Housing starts new

After a brief lull in October, homebuilders in the National Capital Region kicked things up a notch last month.

Ottawa-Gatineau developers started work on 1,496 new builds in November, according to the Canada Mortgage and Housing Corp., up from the 1,240 starts recorded in November 2019.

Multi-unit projects continue to account for the lion’s share of housing starts in the region. Construction began on more than 1,100 new condo and apartment units last month, nearly 20 per cent more than a year earlier, as builders responded to pent-up demand for rental housing in the core.

Meanwhile, the number of single-detached starts rose 25 per cent year-over-year as homebuyers increasingly sought out larger properties with space for amenities such as home offices and gyms, a shift that has accelerated during the pandemic.

Meanwhile, the region’s annual pace of housing starts – which can fluctuate dramatically from month to month due to the volatile nature of multi-unit starts – spiked last month, mirroring the national trend.

Back to 'heights of summer'

CMHC said the seasonally adjusted annual rate of new builds in Ottawa-Gatineau jumped from 10,401 in October to 17,602, a 69 per cent increase. The adjusted pace of multi-unit builds nearly doubled from 6,800 to more than 13,500.

Nationally, builders broke ground on more homes in November as construction on multi-family housing picked up in Vancouver and Montreal, CMHC said.

The seasonally adjusted annual rate of housing starts rose 14.4 per cent to 246,033 in November, up from 215,134 in October, the agency said.

“Homebuilding activity roared back to the heights of summer in November, blowing past market expectations,” Sri Thanabalasingam, senior economist at TD Economics, said in a client note.

November's housing starts rate rose 15 per cent to 233,106 in cities, while rural starts were estimated at a seasonally adjusted annual rate of 12,927 units by CMHC's tally.

The pace of housing starts was up 22.5 per cent to 177,661 for urban multi-family homes such as apartment buildings, but the rate of starts for single-family homes fell 3.8 per cent to 55,445 in cities, the report said.

November’s upswing in multi-family home building came on the heels of two consecutive monthly declines, after October’s data showed a slew of single-family homes were under construction, CMHC chief economist Bob Dugan said in a statement.

“While other parts of the economy are being gripped by the second (COVID-19) wave, housing starts shrugged off any challenges and reaccelerated in November,” wrote Royce Mendes in a client note from CIBC Economics.

“The acceleration showed up in the volatile multi-unit segment of the market, which had been slumping somewhat since August, while single-family home starts decelerated a touch in November.”

The six-month average trend of housing starts now sits at 231,491 per month, CMHC said.

“The near-term outlook for starts is on sturdy ground,” Thanabalasingam's note said, citing the high number of residential building permits and decline in existing housing inventory.

“All told, 2021 is poised to be a good year for housing construction.”

– With files from the Canadian Press