Ottawa started 914 homes in September. My August call, scored

The call, and the score

On Oct 4 I wrote that August's starts spike had drained Ottawa's permit pool. I put two conditions on the September numbers: starts would fall back toward the trend of roughly 960 a month, and the pool of permitted units waiting to start would stay under 4,500. CMHC published September on Oct 16. Ottawa started 914 homes, and the pool is 4,329. Both conditions held.

Holding is not the same as being right about the story, though. The pool did not keep draining. It rose 5.9 percent, from 4,087 to 4,329. So the honest score is half and half: the August drain was real, and it did not continue.

Check that the table hangs together

Year to date starts for Ottawa were 7,254 through August. Add September's 914 and you get 8,168, which is exactly what CMHC prints. Same test on last year: 6,694 plus 474 is 7,168, also exact. September is up 93 percent on a year earlier (914 divided by 474 is 1.93).

Under construction should equal last month's count plus starts minus completions. 17,905 plus 914 minus 419 is 18,400. CMHC reports 18,382, so 18 units off, and that is close enough to trust the rest.

Where the pool came from

The same identity works on permits. The September pool equals August's, less the starts that came out of it, plus new permits that went in. 4,329 equals 4,087 minus 914 plus new permits, so new permits come to about 1,156. That is my inference from CMHC's stock numbers, not a published count. Cancellations and starts that do not pass through this pool are invisible.

In August the same arithmetic gave about 350 new permits. So the picture is one thin month followed by one fat month, and neither should be read alone. Over the two months together, the pool went from 4,972 in July to 4,329, down 643 units or 12.9 percent. Starts were 1,235 plus 914, or 2,149. Implied permits were 350 plus 1,156, or 1,506. The gap, 2,149 minus 1,506, is the 643.

At the new trend of 11,671 a year, which is 973 a month, 4,329 units is 4.4 months of starts. In August it was 4.3. Nothing cliff shaped there. If I had to name a mistake in my October 4 headline, it is the word "drained". A two month drawdown of 13 percent is a lean pool, not an empty one.

Single detached is doing the lifting

Detached starts were 240 in September against 93 a year ago, up 158 percent. They were 26 percent of the month (240 divided by 914), against 20 percent last September (93 divided by 474). Year to date it is 1,416 against 931, up 52 percent. Everything else, which means townhouses, rows and apartments, is up 8 percent year to date, 6,752 against 6,237, and its trend is flat at 9,449.

That fits what I have been writing about resale. Detached is where the new supply is arriving fastest, and it is also the segment where September's inventory was already tightest relative to 2016.

The part that did not change

Multiply September by 12 and you get 10,968, almost exactly CMHC's business as usual figure of 11,000 a year. That is not a seasonally adjusted number, so do not lean on it, but the trend row says the same thing: 11,671. CMHC's estimate of what Ottawa needs is 33,000 to 38,000 a year, so the trend is 35 percent of the low end and 31 percent of the high end (11,671 divided by 33,000, then by 38,000). I laid out that gap in the CMHC supply post, and two lively months did not move it.

Completions fell too, to 419 from 591 in August and 843 in July. Starts were 2.2 times completions in September (914 divided by 419). That is the opposite of what I described in August, when the city was finishing more than it started. One caveat I still cannot close: Ottawa here is the Ontario side of the metro area, and I have not found a city only September count to compare it with.

What it means if you are buying or selling

Started homes are not listings. A start in September is a keys date in 2027 or 2028 for most of these. If you are selling this fall, your competition is still resale inventory. If you are weighing a new build, ask the builder what is permitted and scheduled, not just what is sold.

I sell houses. I do not build them or finance them, so builder contracts and mortgage questions belong with a lawyer and a lender.

What would prove me wrong next

My bet for October, due from CMHC in mid November: starts under 1,000 and the pool still between 4,000 and 4,800. A pool above 4,800 says builders are permitting faster than they start, and that the August scare was noise. Below 4,000 says the drawdown is back. I will check it against this post.

If you are choosing between new construction and resale and want the numbers on a specific street, call me at 613-262-6545 or email fil@613realtor.ca. Or see what is listed right now and we can compare.