New home construction takes place in a development in Oakville, Ont., on Thursday, Aug. 15, 2019. THE CANADIAN PRESS/Nathan Denette

New home construction takes place in a development in Oakville, Ont., on Thursday, Aug. 15, 2019. THE CANADIAN PRESS/Nathan Denette

Canadian homebuilding remains strong despite 20% drop in September, say economists

Economists had expected an annual rate of 240,000 starts in September

Canada’s homebuilding activity remained historically strong last month even though the annual pace of starts plunged 20 per cent from August, economists said Thursday.

Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts was 208,980 units in September, down from 261,547 units in August but in line with average readings in 2019.

Economists had expected an annual rate of 240,000 starts in September, according to financial markets data firm Refinitiv.

The decrease was driven by weakness in Ontario and British Columbia and lower starts in condos.

However, the six-month moving average of the monthly seasonally adjusted annual rates of housing starts rose slightly to 214,647 in September, up from 212,609 in August.

“The national trend in housing starts was largely unchanged in September,” said Bob Dugan, CMHC’s chief economist.

COVID-19 has resulted in volatility in multi-family starts, especially in Toronto.

“We expect national starts to trend lower by the end of 2020 as a result of the negative impact of COVID-19 on economic and housing indicators,” he said in a news release.

Broader demand trends remain resilient in the near-term with the level of starts remaining strong by historical standards, said RBC economist Claire Fan.

“Average starts from January to September were one per cent above the same period in 2019 — despite COVID-19 containment measures that shut down wide swaths of the economy in the spring,” she wrote in a report.

“And in Quebec and Ontario, average starts continued to outpace the national comparable while the others, most notably BC, lagged.”

Fan noted that the issuance of permits has remained strong, “suggesting still-solid momentum for housing starts in the near-term.”

Housing starts averaged 237,300 units in the third quarter, up 22.2 per cent from 194,100 units in the second quarter.

“Moving forward, past pre-construction sales gains and low rates should ensure that starts remain elevated through next year,” TD economist Rishi Sondhi wrote.

“Afterwards, some slowing may take place as softer population growth brought upon by the pandemic weighs on housing demand, and ultimately, homebuilding.”

The annual pace of urban starts fell 21.1 per cent in September to 195,909 with starts down in eight of 10 provinces:

Housing starts in Ontario fell by nearly 37,000 units to 78,700 while activity in B.C. fell by 10,900 units to 30,700 units.

Homebuilding activity in Quebec dropped by 7,500 to 48,000 units.

Alberta drove higher starts in the Prairie region where urban starts climbed by 5,700 to 24,800 units, offsetting losses in Saskatchewan and Manitoba.

Starts in Atlantic Canada slipped with declines in every province but Nova Scotia.

The pace of urban starts of apartments, condos and other types of multiple-unit housing projects decreased 27 per cent to 146,005 units, while single-detached urban starts increased 3.4 per cent to 49,904.

Rural starts were estimated at a seasonally adjusted annual rate of 13,071 units.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

On Sept. 29 the First Sylvan Lake Sparks decorated the sidewalks at the Bethany Care Centre with pictures and uplifting messages. Pictured left to right are Maddie, Nora, Teagan, and Isabelle. At the time all Girl Guide meetings and activities had to be held outside. (Photo Submitted)
Sylvan Lake Girl Guides planning cookie drive-thru this weekend

The cookie drive-thru is Nov. 29 from 12-4 in the high school parking lot

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, announced the province surpasses one million COVID-19 tests Friday. (Photo by Chris Schwarz/Government of Alberta)
COVID-19: Central zone active cases up by 100 in last 24 hours

Most central Alberta communities under province’s enhanced measures list

Sylvan Lake RCMP, Fire Department and Victim Services will be out on Dec. 5 for the annual Charity Check-stop. File Photo
Give Sylvan Lake RCMP the bird at Charity Check-stop

Sylvan Lake RCMP will be accepting frozen turkeys for the food bank during the charity check-stop

Ecole H.J. Cody School. File Photo
Sylvan Lake high school temporarily moves to online classes

Over the weekend, H.J. Cody reported six positive cases of COVID-19

.
Alberta confirmed more than 1,500 COVID-19 cases Sunday

Central zone active cases slightly up

Kyle Charles poses for a photo in Edmonton on Friday, Nov. 20, 2020. Marvel Entertainment, the biggest comic book publisher in the world, hired the 34-year-old First Nations illustrator as one of the artists involved in Marvel Voice: Indigenous Voices #1 in August. THE CANADIAN PRESS/Jason Franson
VIDEO: Indigenous illustrator of new Marvel comic hopes Aboriginal women feel inspired

Kyle Charles says Indigenous women around the world have reached out

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Canada’s inability to manufacture vaccines in-house will delay distribution: Trudeau

First doses of COVID-19 vaccine expected in first few months of 2021, prime minister says

This undated photo issued by the University of Oxford shows of vial of coronavirus vaccine developed by AstraZeneca and Oxford University, in Oxford, England. Pharmaceutical company AstraZeneca said Monday Nov. 23, 2020, that late-stage trials showed its coronavirus vaccine was up to 90% effective, giving public health officials hope they may soon have access to a vaccine that is cheaper and easier to distribute than some of its rivals. (University of Oxford/John Cairns via AP)
VIDEO: How do the leading COVID vaccines differ? And what does that mean for Canada?

All three of the drug companies are incorporating novel techniques in developing their vaccines

Ilaria Rubino is shown in this undated handout image at University of Alberta. Alberta researcher Rubino has developed technology allowing mostly salt to kill pathogens in COVID-19 droplets as they land on a mask. THE CANADIAN PRESS/HO-University of Alberta
Alberta researcher gets award for COVID-19 mask innovation

The salt-coated mask is expected to be available commercially next year after regulatory approval.

Russ and Luanne Carl are sharing about their experiences of fighting COVID-19 this past summer. (Photo submitted)
Stettler couple opens up about COVID-19 battle

Luanne and Russ Carl urge others to bolster personal safety measures amidst ongoing pandemic

This 2019 photo provided by The ALS Association shows Pat Quinn. Quinn, a co-founder of the viral ice bucket challenge, died Sunday, Nov. 22, 2020, at the age of 37. (Scott Kauffman/The ALS Association via AP)
Co-founder of viral ALS Ice Bucket Challenge dies at 37

Pat Quinn was diagnosed with Lou Gehrig’s disease, also known as amyotrophic lateral sclerosis, in 2013

Minister of Justice and Attorney General of Canada David Lametti speaks with the media following party caucus in Ottawa, Tuesday, January 28, 2020. THE CANADIAN PRESS/Adrian Wyld
Exclusion of mental health as grounds for assisted death is likely temporary: Lametti

Senators also suggested the exclusion renders the bill unconstitutional

Claudio Mastronardi, Toronto branch manager at Carmichael Engineering, is photographed at the company’s offices in Mississauga, Ont., Thursday, Nov. 19, 2020. As indoor air quality becomes a major concern in places of business, HVAC companies are struggling to keep up with demand for high quality filtration systems. THE CANADIAN PRESS/Chris Young
Business is booming for HVAC companies as commercial buildings see pandemic upgrades

‘The demand right now is very high. People are putting their health and safety ahead of cost’

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Long-awaited federal rent subsidy program for businesses hurt by COVID-19 opens today

The new program will cover up to 65 per cent of rent or commercial mortgage interest

Most Read