Canada’s annual pace of housing starts rose 10% in May from April this year as expectations grow for lower interest rates charged on mortgages.
Canada Mortgage and Housing Corp. (CMHC) reports that the seasonally adjusted annual rate of housing starts in May totaled 264,506 units, up from 241,111 in April.
Housing starts saw a big increase in Montreal, where the pace more than doubled with an increase of 104%. Housing starts in Toronto rose 47%, boosted by multi-unit starts.
However, those gains were partly offset by a 32% decline in housing starts in Vancouver during May from April.
CMHC said the overall annual pace of urban housing starts was 246,111 units in Canada, up 11% from 221,376 in April.
The annual pace of multi-unit urban starts increased 13% to 203,141 during the month, while single-detached urban starts rose 2% to 42,970.
Earlier in June, the Bank of Canada lowered interest rates by 25 basis points, the central bank’s first reduction in four years.
The lower interest rates apply to variable rate mortgages and are leading to renewed activity in Canada’s real estate sector.
The Bank of Canada is widely expected to continue lowering interest rates throughout the remainder of this year and into 2025.
