The number of Canadian new builds unexpectedly surged in April, in another sign of recovery for the nation’s battered real estate market.
Construction started work on an annualised 235,460 housing units last month, the highest level in 10 months and up 23 per cent from the 191,981 units seen in March, the Canada Mortgage and Housing Corp. (CMHC) has reported.
The gain in Canadian new builds was driven by new multi-unit construction in the two main cities of Toronto and Vancouver.
The report is in line with other recent data that suggests the nation’s housing sector is stabilising from a recent slump, easing concerns that some of the country’s more expensive markets like Toronto and Vancouver were poised for a major correction.
The level of new builds in April is well above recent averages, with economists anticipating housing starts at just 195,500 during the month.
Housing markets in Toronto and Vancouver had cooled considerably last year as officials tightened mortgage regulations, imposed taxes on overseas property investors and took other measures designed to curb runaway prices – raising worries the steps had gone too far and may have harmed the property market.
Yet economic fundamentals – everything from strong employment gains to a sharp increase in immigration – remain supportive. Along with borrowing costs reducing in recent months from the major financial institutions.
Multiple-unit urban starts were up 30 per cent to an annualised 175,732 units, while single-detached starts in urban centres were up by 6 per cent, CMHC said in its release. Vancouver recorded a 63 per cent increase last month, while new home starts in Toronto were up 18 per cent.
Builders also had been holding back construction earlier this year because of excessively cold weather. New home builds slumped to 166,290 units in February – the lowest monthly level in three years – as cold weather slowed construction.