Canadian housing starts rose sharply in April, reaching the highest levels in 10 months, the Canada Mortgage and Housing Corporation reported on Wednesday.
Work on 235,460 units began last month compared to 191,981 units in March. This 23 per cent increase exceeded the expectations of economists, who had predicted the number of housing starts would rise to just 196,400, according to Thomson Reuters Eikon.
The sudden surge in starts can be attributed to multi-unit construction — meaning condos, apartments, and townhouses — in urban centers, but specifically in Toronto and Vancouver. Builds on these multi-unit projects rose by 29.6 per cent to 175,732 in April.
Starts on single-detached homes also experienced a rise of six per cent to 44,655.
This is a positive sign that things are looking up for the real estate market, economic analyst Priscilla Thiagamoorthy, of BMO Capital Markets, noted in a report.
“Although the Canadian housing market slowed at the start of the year, the latest data suggest the downward momentum has stabilized and could even be picking up again,” Thiagamoorthy wrote. “Underlying demand remains healthy amid solid demographic trends and a strong labour market.”
The data also confirms Bank of Canada Governor Stephen Poloz’s belief that the housing market will “return to normal growth” later this year.
In addition to the upward trend in housing starts, some markets have also seen an increase in home sales. Specifically, in the GTA in April, sales spiked 16.8 per cent, according to the Toronto Real Estate Board.