OTTAWA — The Canadian housing market continued to show signs of strength as the annual pace of housing starts in November came in faster than expected.
The Canada Mortgage and Housing Corp. said Tuesday the annual pace increased to 211,916 units in November compared with 197,712 units in October.
That compared with the 197,300 that had been expected by economists, according to Thomson Reuters.
"Canadian homebuilding activity remains robust, and accelerating momentum through the latter stages of 2015 will likely catch the eye of policy-makers currently stewing over the strength in real estate," Bank of Montreal senior economist Robert Kavcic said.
Housing starts in Waterloo Region trended lower in November. The housing corporation says starts were trending at an annual rate of 3,378 units, down from 3,497 in October, due to fewer starts of single-detached homes and apartments.
There were 286 actual housing starts in the Kitchener-Cambridge-Waterloo census metropolitan area last month, down from 753 in November 2014. Last year's total was inflated by the launch of apartment projects containing 646 units.
The housing corporation noted that demand for townhouses continues to grow because they are an affordable option to single-detached homes. Builders started 84 townhouses in the region last month, up from 13 a year earlier.
Nationally, the rate of urban starts increased by 7.7 per cent in November to 195,121, boosted by a gain in multi-unit starts that increased by 13.2 per cent to 137,898. Single-detached urban starts fell 3.6 per cent to 57,223 units.
The pace of urban starts increased in the Prairies, Ontario and Atlantic Canada, but fell in British Columbia and Quebec.
Housing corporation chief economist Bob Dugan noted that rising single home prices continue to support demand for multi-home starts.
"However, inventory management is necessary to make sure that these units do not remain unsold upon completion," he said.
Rural starts were estimated at a seasonally adjusted annual rate of 16,795 units.
The strength of the Canadian housing market is being closely watched.
New home construction in Canada has picked up strength in the second half of this year after a weak start to 2015.
"Looking forward, relatively tight housing market conditions in Ontario and B.C. may continue to encourage a relatively lofty pace of new home construction at least through the first half of 2016," TD Bank economist Diana Petramala said.
"However, the combination of weaker economic growth and rising longer-term borrowing rates in Canada will likely pull some of the steam out of housing activity overall next year."
The six-month moving average of the monthly seasonally adjusted annual rates for housing starts across the country was 208,401 units in November, up from 206,125 in October.
The report on housing starts came as Statistics Canada said municipalities issued $7.7 billion worth of building permits in October, up 9.1 per cent from September and the first increase in three months.
The value of residential building permits totalled $4.8 billion in October, up 15.5 per cent from September, while permits for non-residential buildings slipped 0.2 per cent lower to $2.9 billion in October.
Municipalities in the Kitchener-Cambridge-Waterloo census metropolitan area issued permits worth $92.4 million in October. That is down slightly from $93.7 million in September. The local figures are seasonally adjusted.