Canada's building boom continues

Number of building permits rises for second month, with value up 7.4 per cent

PUBLISHED : Wednesday, 11 December, 2013, 3:47am
UPDATED : Wednesday, 11 December, 2013, 3:47am

Canadian building permits rose for a second month in October as the volume of home construction approached a new record.

The value of municipal permits rose 7.4 per cent to C$7.19 billion (HK$52.4 billion), Statistics Canada said last week. Economists forecast a 1 per cent gain according to the median of nine responses to a Bloomberg survey.

The value of residential permits issued rose 6.4 per cent to C$4.41 billion, close to the C$4.55 billion record set in May. The value of single-family housing permits rose 4.7 per cent to C$2.38 billion, while that for permits for apartment and condominium blocks gained 8.4 per cent to C$2.02 billion, an increase of 18.3 per cent from a year earlier.

Canada's housing market has retained its strength after Finance Minister Jim Flaherty introduced tighter mortgage- lending rules last year on concern about overbuilding of condominiums in Toronto and Vancouver. Low mortgage rates are supporting demand, and Bank of Canada policymakers said that housing has been stronger than they forecast.

The number of homes approved by municipalities rose 6.9 per cent in October to 18,823, Statistics Canada said. The number of permits approved for single-family homes fell 2.1 per cent, while approvals for multiple-family projects increased 12.2 per cent.

The share of Canadians predicting home values in their neighbourhood will rise reached 40 per cent, the most since March last year, according to the Bloomberg Nanos Canadian Confidence Index published December 2.

For non-residential construction projects, the value of permits advanced 9 per cent to C$2.79 billion, leaving them 23.3 per cent below the October 2012 level.

Statistics Canada also boosted its estimate for September's increase in total permits to 4.1 per cent from 1.7 per cent.

The value of permits was 6.2 per cent lower in October than the same month a year earlier.