Housing starts across Canada remained flat year over year in November, although seasonally-adjusted numbers point to growing momentum in British Columbia and Quebec as developers ramp up to meet immigration demands.
“The trend essentially held steady for a third consecutive month in November,” said Bob Dugan, CMHC’s chief economist, in releasing November numbers Monday. “This is in line with our expectations for 2014, of a stable national picture with new home building concentrated in multiple starts, particularly in Quebec, British Columbia and Ontario.”
Seasonally adjusted starts in November climbed 6.5 per cent month-over-month to 195,620 units. More than half of those starts were multi-unit properties in urban centres, led largely by Ontario and Quebec, though British Columbia posted the largest gains – 26.7 per cent – from October.
It’s important to note, say analysts, that starts were flat from the year-ago period.
While reports suggested overbuilding would become a problem for Canada’s major urban centres, CMHC said more housing is needed to fill the demand created by healthy immigration.
“Ask any real estate developer in any of Canada’s major cities about the risk of overbuilding, and the first line of defense would be immigration and its critical role in supporting demand,” said Benjamin Tal, CIBC’s deputy chief economist. “It turns out that, at least for now, this claim is more valid than widely believed.”
New immigrants account for 70 per cent of the increase in Canada’s population. Half of these new immigrants are aged between 25 and 44, representing the country’s economic engine, according to CMHC’s 2014 Canadian Housing Observer.