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Housing starts in Canada jumped to their highest level in seven months, as the country’s two largest provinces ramped up construction of apartments, townhomes and condominiums.
Builders began work on 264,506 units annually in May, it said Data released on Monday By Canada Mortgage and Housing Corporation. That represents a 9.7 percent increase from the previous month, more than economists in a Bloomberg poll had expected.
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Ontario and Quebec – the country’s two most populous provinces – led the increase in starts, rising by 18 per cent and 67 per cent, respectively. Housing starts fell by 16 per cent in British Columbia, Canada’s westernmost province. Compositionally, the number of detached homes that began construction during the month changed little, meaning that gains were concentrated in the construction of multiple units.
The federal government announced billions of dollars in new loans and tax breaks aimed at encouraging construction as housing affordability deteriorates. The country’s chronic housing shortage has been exacerbated by an influx of temporary residents that has pushed population growth to one of the highest levels in developed countries.
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CMHC estimates that Canada needs to build at least 3.5 million additional housing units by 2030 to restore affordability.
“While this is good news for housing supply, we expect downward pressure on starts through the rest of 2024,” Bob Duggan, chief economist at CMHC, said in the release.
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