Canada: Strengthening housing data – TD Securities

Analysts at TD Securities note that the Canadian housing starts were stronger than expected at 227k (market: 213k, TD: 230k) in August.

Key Quotes

“The headline print was the result of a sharp increase in single-family starts which rose 13.6% m/m to 53.2k, the strongest pace since mid-2018, while urban multi-unit starts fell by 1.4%. The strength in single-family starts is bullish for investment given the higher capital outlays for a single-family home versus a condo unit, and supports our expectations for residential investment to sustain its recent momentum into Q3.”

“Building permits also beat expectations with a 3.0% m/m increase in July (market: 2.0%). Residential permit issuance rose by 2.2% on a 4.2% increase in the multiunit component while non-res permits saw a 4.3% gain.”