"The currently elevated level of condominium units under construction supports our view that condominium starts should trend lower over the coming months"
-Bob Dugan, Economist at CMHC
Housing starts in Canada increased more than expected in September, while the prior month's figure was also revised upwards. According to the Canada Mortgage and Housing Corp, the seasonally adjusted annual rate of housing starts rose to 197,343 units up from 196,283 units in August. Multiple-unit projects such as apartments and condominiums climbed 2.4% to 11,579 units, whereas single-family homes dropped 2.9% to 62,440 units.
The data comes on heels of the report from Statistics Canada, which showed that the value of building permits declined 27.3% to $6.7 billion in August, falling the most on record after a robust surge in the previous month. Economists are worried about Canada's housing market amid increasing building activity and weaker sales. The Bank of Canada admitted in its September statement that the housing sector appeared to be stronger than expected. Additionally, the IMF has said recently that Canada may need tougher rules to slow increases in the housing market. However, while the IMF has lowered its global growth outlook, it remained positive about the next two years in Canada. The nation's economy will be driven by demand from its neighbour the U.S. The think-tank also warned Canada against prematurely hiking interest rates, as well as highlighted risks to the economy from low commodity prices, elevated household debt and high housing prices.
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