Condominium creation continues

Condo boom drives starts in Canada to 29-year high

Condo construction pushed Canadian housing starts to a 29-year high in September, suggesting troubles in the U.S. housing market haven’t reached home builders north of the border. Canada Mortgage and Housing Corp. said starts rose 19.6 per cent to a seasonally adjusted 278,200 units, up from 232,700 in August ““ the biggest burst since 1978.

The numbers, released earlier this week, drew most of their strength from an increase in multiple-family home starts in the country’s big cities, especially condominiums.

“The main story behind (the numbers) is the condo sales (and) it’s not a surprise, because the Canadian economy’s doing so well,” said Julie Taylor, a senior economist at CMHC. “It’s a matter of first-time buyers going into more affordable housing, which tends to be the multiples.”

Canada and the U.S., she added “are two separate entities, and what’s going on in the States has been going on for quite a few years.”

The numbers surprised many economists, who say starts were expected to moderate to 218,000.

Craig Alexander, deputy chief economist at TD, conceded that a generally forecast cooling of the housing market has yet to take place, but said the bank wasn’t likely to change its own forecast after the latest figures.

TD puts monthly housing starts at 200,000 units by the end of 2008.

Among its findings, CMHC said the seasonally adjusted annual rate of urban starts increased 22.9 per cent to 244,400 in September.

Urban starts were up 23.6 per cent in Ontario. But single-family starts fell everywhere except in Quebec, where they were unchanged.