The latest data put September starts at 205,900 on a seasonally adjusted annualized basis, in line with the 20022008 housing boom when starts checked in at more than 200,000 a year.
This time it appears the condominium sector is driving the market, a commonality across the country.
That construction is expected to be a key economic driver.
Royal Bank of Canada forecasts 2.4% growth in gross domestic product in the third quarter on an annualized basis, with the housing sector responsible for 50 basis points of that growth.
Bank of Montreal economist Doug Porter said Tuesday there are now 4.3 construction jobs in the United States for every one in Canada, far off the historical norm of seven to one.
"It's tough to believe" Canada can continue at its present pace, Mr. Porter said in a note.
"We don't anticipate the large-scale collapse we saw in the United States," said David Onyett-Jeffries, an economist at RBC. "Maintaining residential construction growth has positive implications for GDP and is going to provide support to it."
CMHC said urban multiple starts, largely composed of condominiums, accounted for most new-home construction last month.
Urban-multiple starts were an annualized 118,000 in September.
Who is actually buying those condominiums remains anybody's guess.
Estimates by such groups as Urbanation Inc., a condominium research firm, put up to 60% of condo purchases in the hands of investors as opposed to people who plan to occupy the dwellings they buy.
"The anecdotal story is [that] foreign money is buying condos, but we don't have any data to back it up," said Mr. Onyett-Jeffries, adding there are several arguments in favour of housing for foreign investors.
"[Canada] has a stable economy and a stable banking system and the housing market is fundamentally strong, especially as compared to the United States. Given global uncertainties, you can make the argument Canadian real estate has been solid all the way through," Mr. Onyett-Jeffries said.
Ben Myers, executive vicepresident of Urbanation, says Toronto set a record for quarterly construction with 40,000 units begun in the second quarter of this year. "Investors are not working on the same dynamic. A lot of them are looking at it as a place [to store their cash]. They want out of whatever international market they are in. They look at it as a straight investment and their others are not performing as well," he said.
At the same time, individual homebuyers are still a strong force, partially driven by near-record low interest rates. "There is a feeling in Canada that the economy is performing well. Interest rates have kept people in the market," said Don Lawby, CEO of Century 21 Canada. "As long as people feel they have a job, the future looks OK, they have money and interest rates are where they are, people will continue to look to get into the market."
Francis Fong, an economist at Toronto-Dominion Bank, said European turmoil has led investors to buy government bonds, which has kept rates low and improved affordability, but he doesn't expect that to continue forever.
"Spending fatigue and high levels of debt among Canadian households will lead to further moderation in the housing market," he said. "We forecast that housing starts will slow to an average of 180,000 by next year, only to trend lower the year after."
MULTIPLE UNITS KEEP STARTS RISING
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