Canadian housing starts in June jumped 28 per cent to 248,100 annualized units, the fastest pace of home construction in almost a decade, BMO Capital Markets says.
The Canada Mortgage and Housing Corporation said in a release that housing starts jumped by more than a quarter during the month, and BMO noted that multi-family units — the portion of the numbers that include condominiums — drove the increase, particularly in Eastern Canada.
Ontario's starts almost doubled, Quebec's starts jumped by 50 per cent and Atlantic Canada's starts jumped by about two-thirds, according to Scotiabank Economics.
B.C., on the other hand, saw a decline of 6,000 to 34,000 according to TD Economics.
Condo starts in Toronto reached a 30-year high for the month, which was a "surprise on the upside," said Omar Abdelrahman, a TD economist. Including all forms of housing, Toronto starts were up 138 per cent largely spurred by the condo segment.
The demand for condos — the "seemingly last affordable option" — is driven by millenials, migrants and baby boomers looking to downsize, said Priscilla Thiagamoorthy, an economist with BMO capital markets.
"The national inventory of newly completed and unabsorbed multi-unit dwellings has remained below its 10-year historical average so far in 2018," said Bob Dugan, Canada Mortgage and Housing Corporation's chief economist in a release.
In other words, the demand for affordable housing was strong in June — especially in expensive urban markets like Toronto —and doesn't seem to be slowing.
Building permits value on the rise
In a separate report, Statistics Canada said Tuesday the value of building permits issued by Canadian municipalities increased 4.7 per cent to $8.2 billion in May.
Much like housing starts, building permits are considered a leading indicator for the economy because they hint at activity and investment to come down the line.