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Josh Nye, senior economist at the Royal Bank of Canada, notes that the Canadian housing starts picked up to 227,000 annualized units in August as the 6-month trend is the strongest in more than a year and the building permits for July came in at a solid 221,000.

Key Quotes

“Canada’s housing recovery is on. The 6-month trend in housing starts is now just shy of 2017’s annual pace, which was the fastest in a decade. The pickup in starts, after a slowdown through much of 2018 and the first half of this year, mirrors a recovery in resale markets in recent months. The residential sector added to growth in Q2 for the first time in more than a year, and it looks like we’re in for a repeat performance in Q3.”

“Regionally, the trend in housing starts in Quebec and BC is running close to cycle highs while the Prairies are seeing a modest recovery. Ontario, which was a laggard over the first half of the year, saw a nice increase in August and that helped the 6-month trend hook higher.”