Canada’s housing starts have reached their highest level in seven months, as the country’s two largest provinces ramp up construction on apartments, townhouses, and condominiums.
According to data released Monday by the Canada Mortgage and Housing Corp, builders began work on an annualized 264,506 units in May. This represents a 9.7% increase from the previous month, exceeding economists’ expectations in a Bloomberg survey.
Ontario and Quebec “- the country’s most populous provinces “- led the increase in starts, up 18% and 67%, respectively. Housing starts fell by 16% in British Columbia, Canada’s westernmost province. The number of single-detached homes that began construction during the month remained relatively stable, indicating that gains were concentrated in multi-unit builds.
As housing affordability worsens, the federal government has announced billions of dollars in new loans and tax breaks to encourage construction. The country’s chronic housing shortage has been exacerbated by an influx of temporary residents, which has resulted in one of the fastest population growth rates in developed countries.
To restore affordability, the CMHC estimates that Canada will need to build at least 3.5 million additional housing units by 2030.
“While this is good news for housing supply, we do expect downward pressure on starts through the rest of 2024,” Bob Dugan, CMHC’s chief economist, said in the release.
