(Bloomberg) -- Canada’s housing starts surprisingly rose to the highest level in more than a year.
Construction was started on an annualized 279,509 units in July, according to data released Friday by the Canada Mortgage and Housing Corp. That’s the highest level since June 2023, and exceeded the 245,000 units expected by economists.
Starts rose 15.7% from the previous month, and the increase was mostly in multi-unit buildings. Regionally, new construction was driven by the country’s largest province, Ontario, where starts rose 59%. Alberta, British Columbia and Saskatchewan also ramped up construction.
The data add to evidence of construction momentum picking up as borrowing costs start to fall, and amid billions in new loans and tax breaks from the federal government. Still, starts remain below 2021 and 2022 levels.
Housing affordability has worsened markedly in recent years. The country’s chronic shortage of homes has been further aggravated by an influx of temporary residents that has driven population growth to one of the highest levels among developed countries.
Housing starts are expected to rise to average 264,000 annualized pace in 2025, according to a Bloomberg survey of economists. At the end of last year, CMHC estimated Canada needs to build at least 3.5 million additional housing units by 2030 to restore affordability.
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