The pace of housing starts in Canada picked up up slightly in September as work began on more multiple-unit dwellings including condominiums, Canada Mortgage and Housing Corp. said Wednesday.
CHMC said there were 17,343 actual starts in September. Extrapolated over 12 months, that produced a seasonally adjusted annual rate of 197,343 starts up from 196,283 in August.
Economists had expected the annual pace to come in at 196,100 on a seasonally adjusted basis, according to Thomson Reuters.
CMHC’s six-month moving average increased to 197,747 units in September compared with 191,095 in August.
“The increase in the trend reflects stronger starts activity since April, largely concentrated in multi-unit dwellings including condominiums,” CMHC chief economist Bob Dugan said in a statement.
“However, the currently elevated level of condominium units under construction supports our view that condominium starts should trend lower over the coming months.”
The housing starts data followed a report Tuesday by Statistics Canada that the value of building permits issued by municipalities plunged 27.3 per cent in August far more than the 12.5 per cent drop that economists had expected, according to Thomson Reuters.
BMO Capital Markets senior economist Robert Kavcic noted that Canadian housing starts appears to have hit a ceiling at the 200,000 level.
“This will let policy-makers breathe easier, and suggests that overall building activity in Canada remains within the range required to satisfy demographic demand,” Kavcic wrote in a note to clients.
However, he noted that there are plenty of regional differences.
Kavcic noted Alberta remains hot, while Manitoba and Saskatchewan appear to be cooling and Atlantic Canada remains cool.
CMHC said the seasonally adjusted annual rate of urban starts in September decreased in British Columbia and Atlantic Canada and increased in Quebec, Ontario and the Prairies.
Urban starts recorded a seasonally adjusted annual rate of 177,019 in September, up from 176,234 in August.
The annual pace of multiple urban starts in September increased to 114,579 units while the single-detached urban starts segment decreased to 62,440 units.
Rural starts were estimated at a seasonally adjusted annual rate of 20,324.
The housing market has been closely watched by policy-makers and economists for signs weakness with household debt cited as a key risk to the financial system and the economy.
Ottawa has moved four times since 2008 to tighten mortgage lending rules in an effort to keep spending under control.