August 2020 Busiest New Construction Month in 13 Years!

Canadian housing starts in August, led by a heated construction pace in Ontario, climbed to the highest level in 13 years!

On a national level, starts reached 262,400 annualized units in August.  This is an increase of a whopping 7%  from July’s reading and marks the fastest pace of home building seen since 2007.

The Canada Mortgage and Housing Corporation (CMHC) released the housing starts data earlier this week and is another sign that the housing market is in the midst of a healthy recovery.

“Add this report to the list of very strong Canadian housing data that we’ve seen since the worst of the pandemic in April, as the sector continues to outperform other parts of the economy,” wrote TD Economist Rishi Sondhi.

“The robust pace of homebuilding is being driven by past sales gains, with low interest rates also providing support. These factors should keep homebuilding elevated through next year as well,” he continued.

Condo developers in Ontario were responsible for a substantial amount of the home construction strength seen on the national level, with starts in the province jumping by 30,700 units in August to 114,800 annualized units. Sondhi said it marked the strongest pace of home building in the province since 1990.

Looking ahead, market experts believe the blazing pace of home construction will likely run into the realities of the ongoing pandemic, with population growth temporarily slowing and government income support programs winding down, resulting in dampened demand for housing.

(Source: 1)  Canada Mortgage and Housing Corporation; August 2020;   2) Sean MacKay, Livabl.com, 2020/09)