In contrast to the Stats Can figures released last week, that suggest that building permits took a heavy hit, building starts data from CMHC for September beat expectations in the other direction.

Boosted by a surge in starts for condominiums, September starts were   a seasonally adjusted 205,900 units last month.  This builds on August’s starts, which were upwardly revised to 191,900 from 184,700.

“Housing starts picked up in September due to an increase in multiple starts in the Atlantic region, Quebec and in British Columbia,” said Mathieu Laberge, Deputy Chief Economist at CMHC’s Market Analysis Centre. “Multiple housing starts are expected to move back towards levels consistent with demographic fundamentals in the near term.”

This is telling news indeed. Analysts had only been expecting 188,000 starts for September.
Seasonally adjusted urban starts increased by 8% in September; Multiple urban rose by 14.2 % to 118,000 units, while urban single starts fell by 1.5 % in September to 67,900 units.

Looking at regional activity, urban starts skyrocketed in the Atlantic region by 47.2% followed by 32.0 % in Quebec and 18.6 % in British Columbia; urban starts fell by 3.5 % in Ontario and by 12.1 % in the Prairie region

What this indicates, is that not only is the housing industry alive, well and very robust, for many, it is an underlying barometer of the health of the economy.
Many feel that, because of the housing industry’s resilience during the economic downturn seen in many pockets around the world over the same months- is a sign that Canada would weather any kind of recession- and may even be fruitful.

While some analysts feel that this boom may slow down somewhat in the coming months, there is no denying the weight of the role that the Canadian housing market plays. It is believed that residential construction will factor favourably into the GDP for Q3.

There have been a flurry of warnings over the last couple of weeks- some of them from international bodies like the IMF, that suggest that the robust housing market in Canada is too good to be true, and is vulnerable to a correction.

Indications seem to be that Canada’s stringent lending policies, as well as many underlying economic fundamentals are what insulates it from a US- style housing market collapse.