The housing market witnessed an 8.8% monthly growth in building commencements in January, according to the latest report from the Canada Mortgage and Housing Corporation (CMHC).
According to CMHC, 213,224 dwelling units started construction during the month, up from the 195,892 in December. Quebec and Ontario witnessed the most significant gains in housing starts, with the former hitting its second-highest growth since the 1990s.
The overall increase in housing starts outpaced the market expectations of 205,000 units.
“Milder-than-normal weather conditions in Central Canada likely boosted construction in Ontario and Quebec while inclement weather probably dragged down activity in British Columbia and parts of the Atlantic Region,” said TD Economist Rishi Sondhi in a note.
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Sondhi said the strong showing for housing starts indicates that market conditions remain favourable to builders.
“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,” Sondhi said.
The growth in housing starts was concentrated in multi-family buildings, which include apartments and condominiums. The number of apartments that commenced construction went up by 13.2% in the month.
Starts for single-detached homes, on the other hand, declined by 2.1% to 55,100 units.
