Home building activity across Ontario picked up in October, driven by significant growth in low-rise home construction.
Housing starts for single-detached homes and semi-detached homes rose 14.2 percent and 29.4 percent, respectively, last month, according to data published by the Canada Mortgage and Housing Corporation (CMHC). Housing starts measure how many homes began construction during a given period and are viewed as a key factor in determining market health.
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TD Economist Rishi Sondhi said that the strong performance suggests that home builders are “reacting to the outperformance in detached home sales observed during the pandemic.”
Detached home prices rose over 20 percent in 14 Toronto region suburbs in October on the back of high buyer demand for less expensive properties with more space outside of city cores. October was the fourth straight month that saw sales exceeding 10,000 total transactions in the region, primarily driven by single-family homes.
Home building across the province has remained resilient through 2020, with housing starts from January to October up over 15 percent compared to the same 10-month period last year.
“Since the restart in May it has been business as usual for the construction sector,” wrote Central 1 Credit Union Economist Edgard Navarrete.
“The only thing impeding the development of new housing is the shortage of skilled labour,” he added.
Looking ahead, Navarrete said that construction activity could decline through the final two months of the year as tighter virus control restrictions are implemented and homebuyer confidence slides as a result of increased economic uncertainty.