Housing starts picked up for the month of October

OTTAWA — An increase in multiunit projects such as condominiums, apartments and townhouses helped push the annual pace of housing starts in October higher, Canada Mortgage and Housing Corp. said Thursday.

The housing agency said the seasonally adjusted annual rate of housing starts last month came in at 205,925 units, up from 189,730 in September.

Economists had expected an annual rate of 200,000, according to Thomson Reuters Eikon.

CMHC said the six-month moving average of the monthly seasonally adjusted annual rates was 206,171 in October, down from 207,809 in September.

BMO Capital Markets senior economist Sal Guatieri said the housing market continues to stabilize after getting dinged by tougher mortgage rules earlier this year, and remains healthy despite higher interest rates.

“The report confirms that national housing construction, though slowing, remains healthy and above long-run household formation rates, supported by solid demographic trends,” Guatieri wrote in a brief report. However, CIBC economist Royce Mendes noted the growth was due to the multiples component, saying: “The fact that headline starts rose on the month is still a positive for tracking estimates of the economy. But given that it came on the back of an increase in multiples coupled with a drop in singles, means that the latest reading on starts may not prove sustainable. We still see the cocktail of tighter lending rules and higher interest rates as causing housing activity to become a drag on the economy come 2019.”