Canadian home builders were busy again last month as housing starts nationwide rose 17 percent over February 2020 levels.
While building activity declined on a monthly basis from an exceptionally active January, TD Senior Economist Sri Thanabalasingam said home construction in February remained “well above pre-pandemic norms” which reflected “the vibrancy in Canada’s housing market.”
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Data on housing starts, released monthly by the Canada Mortgage and Housing Corporation (CMHC), measures how many homes began construction during a given period and are viewed as a key factor in determining market health.
There were 245,900 annualized housing starts logged in February, according to the CMHC. This means that if the pace of home construction recorded in February continued for a full 12-month period, builders would start construction on 245,900 units of housing, including both single-family and multi-family units.
In commentary published this week on the housing starts data, BMO Senior Economist Robert Kavcic wrote that by one measure, Canadian home construction is trending at a pace unseen since 2008. The 13-year high he’s referring to is in the 12-month average for housing starts which, including February’s strong figures, is now sitting at 227,000 annualized units.
That’s a good thing since the bank’s economic research team recently published a separate report encouraging home builders to further ramp up new supply to help ease some of the home price pressure the country is facing.
And, at least in the near term, it appears home construction will continue at this above-average pace.
“Looking ahead, there is little indication that homebuilding activity will revert to historical means anytime soon. A record number of residential permits have been issued recently, aiding housing starts in the coming months,” wrote TD’s Thanabalasingam.
Residential permits are considered a bellwether for future home building because they function as a requisite green light for builders to start construction.