Canadian home construction is increasing at the fastest rate on record, according to new data released for March.
Housing starts surged 21.6 percent last month to 335,200 annualized units, a gain that BMO Economist Shelly Kaushik said marked “the strongest single month in modern history.” While that may sound deliberately hyperbolic, she said the data goes back to 1990, so it’s at least the largest gain in more than 30 years.
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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.
The growth in housing starts recorded in March was concentrated in urban areas in Ontario, BC and the Prairies. Meantime, Quebec and Atlantic Canada saw declines in homebuilding activity.
In commentary published after the data release, Kaushik said soaring housing starts represented a much-needed influx of new supply into the superheated, inventory-constrained market.
“Red-hot demand for real estate propelled a record month for housing starts in March. While the market will need a long stretch of supply growth to have a meaningful effect on prices, the March numbers are a solid start,” she wrote.
In a separate analysis of March’s figures, TD Economist Omar Abdelrahman wrote that the month’s outsized gain in housing starts wouldn’t be sustainable in the coming months.
“Still, with interest rates low, demand robust, prices elevated, and unsold inventory levels low, the backdrop for housing construction remains solid. The consistently high trend in starts seen since the third quarter of last year corroborates this narrative,” he wrote.