Developers in Ottawa-Gatineau continued to rev up housing starts in January in an effort to respond to unrelenting demand for new inventory, according to the latest figures from the Canada Mortgage and Housing Corp.
The region’s builders launched 611 new residential units last month, up from 249 a year earlier, the federal housing agency said Monday.
Those numbers were bolstered by a significant jump in multi-unit starts, which rose 187 per cent to 491 units in January. Meanwhile, construction of single-detached homes was up 54 per cent to 120 units.
Builders on the Gatineau side of the river were particularly busy last month. Developers in the city started work on 240 new units in January, including 223 multi-unit projects such as condos, row houses and townhomes, up from 64 in the first month of 2019.
In Ottawa, developers launched 371 new builds, more than double January 2019’s tally of 185. Multi-unit projects accounted for roughly 70 per cent of that activity, with builders starting a total of 268 new condos, rows and townhouses.
Meanwhile, the region’s seasonally adjusted annual rate of starts dropped 10 per cent in January to 8,878 from 9,896 in December.
Across the country, the pace of housing starts climbed in January from a month earlier on gains in Ontario and Quebec while starts declined in Western Canada, CMHC said.
The agency said that January saw a seasonally adjusted annual rate of 213,224 units started, up 8.8 per cent from the 195,892 starts in December. Of those, rural starts were estimated at a seasonally adjusted annual rate of 10,817 units.
Gains were concentrated in multi-family buildings like apartments and condos that saw a 13.2 per cent increase in starts, while single-detached home starts slipped 2.1 per cent to 55,100 units.
Economists had expected an annualized rate of 205,000 units, according to financial markets data firm Refinitiv.
Construction activity gains reflected regional economic strengths, but analysts noted that weather may have played an outsized role at this time of year.
“Milder-than-normal weather conditions in central Canada likely boosted construction in Ontario and Quebec while inclement weather probably dragged down activity in B.C. and parts of the Atlantic region,” said TD Economist Rishi Sondhi in a note.
“That said, the nice upside surprise in homebuilding also speaks to supportive fundamentals, including sharply rising home prices, low interest rates, robust population growth, low rental vacancy rates in key markets and programs to incent rental construction.”
Quebec saw a big jump of 41,000 units to 77,000 to reach the second-highest level for the province since the 1990s, while Ontario saw gains of 12,400 to what Sondhi said was a “relatively low” level of 69,500 units. Out west, Alberta saw a drop of 16,900 to 22,700, and B.C. dropped 16,600 to 26,200 units.
Weather variances aside, the market showed strong underpinnings that could lead the Bank of Canada to hold off on a rate cut, said BMO senior economist Jennifer Lee in a note.
“Strong immigration and still-low rates continue to support Canadian housing. Despite the usual month-to-month volatility, starts remain solid and a reason why the BoC may be hesitant to cut rates.”
The longer-term trend looked stable, said CMHC, as the six-month moving average of the monthly seasonally adjusted annual rates of housing starts edged down to 210,915 in January compared with 212,212 in December.
Building permit data released by Statistics Canada Monday showed that more construction is on the way, as the total value of building permits in December rose 7.4 per cent to $8.7 billion from a month earlier.
Analysts had expected an increase of 2.3 per cent, according to Refinitiv.
The data showed similar trends to housing starts, as the value of multi-family permits climbed 15.9 per cent to $2.9 billion in the month, while single-family permits were down 3.2 per cent to $2.2 billion.
– With files from the Canadian Press