Canada Mortgage and Housing Corp. says the annual pace of housing starts in August rose nearly seven per cent.
The housing agency says the seasonally adjusted annual rate of housing starts was 262,396 units in August, up from 245,425 units in July.
Multiple-unit starts surged in Toronto, Vancouver and Ottawa, CMHC said. But there may be drawbacks.
“The fact that so much of the recent strength has been focused in the multi-unit sector presents a risk,” Rocye Mendes, an economist at Canadian Imperial Bank of Commerce, said in a report. “As demand from both immigration and students has waned recently, rents have been falling, potentially leading to less interest from investors in the months to come.”
Mendes predicts the pace of building activity will “cool as the year winds down, particularly as mortgage and other loan payments resume after a period in which many households took advantage of deferrals.”
Economists had expected an annual rate of 220,000 starts in August, according to financial markets data firm Refinitiv.
The increase came as the annual pace of urban starts increased 7.1 per cent in August to 248,154. The pace of urban starts of apartments, condos and other types of multiple-unit housing projects climbed 9.1 per cent to 201,214 units, while single-detached urban starts fell 1.0 per cent to 46,940.
Rural starts were estimated at a seasonally adjusted annual rate of 14,242 units.
The six-month moving average of the monthly seasonally adjusted annual rates of housing starts rose to 213,144 in August, up from 204,597 in July.