Housing starts edge higher in November
- Homebuilding remained healthy in November, with starts coming in at 201.3k (annualized) units. On a month-on-month basis, starts edged 0.3% higher from October.
- Single-detached starts dipped by 4% to 56.3k units. Still, single-detached construction remains off the multi-year lows observed earlier in the year. In contrast, multi-family construction increased by 2% to 145.0k units and remains elevated on a trend basis.
- The modest monthly gain was driven by B.C., where starts picked up by 14.2k to an elevated 48.8k units. Starts were also higher in Alberta (+2.7k to 26.6k units), continuing their recovery from the depressed levels seen in early 2019. Starts also increased in most of the Atlantic Provinces, driving a 2.6k unit gain for the region overall. On the flipside, starts were down in Quebec (-7.6k to 45.9k units) after a strong October increase. Homebuilding also eased in Ontario (-9.4k units to 62.1k) to its lowest level since February. The multi-family segment in Toronto drove Ontario's decline, likely in a sign that past declines in condo pre-sales are feeding through into construction. Starts were also lower in Manitoba (-1.3k to 5.8k units) and Saskatchewan (-0.6k to 2.2k units).
Key Implications
- Not too shabby. Housing starts maintained their healthy momentum in November, remaining above the 200k mark for the 6th straight month. However, it's worth noting that starts have cooled from their very robust third quarter rate. And, the fact that November's gain was narrowly concentrated does add a hint of negativity to the report.
- These modest caveats aside, homebuilding was solid last month, buoyed by robust population growth and relatively low interest rates. Alongside a probable pick up in November home sales (due out next week), the starts report is consistent with our call for residential investment to make an important contribution economic growth again in the fourth quarter.
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