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).
- 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.
This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.