Pace of Canadian housing starts surprises with August increase

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Canadian covering starts rose slightly in August, defying the expectations of economists who had been looking for a decamp.

Canada Mortgage and Housing Corp. reported Monday that the the seasonally set right annual rate of housing starts for all areas of Canada was 223,232 entities in August, up from 221,974 units in July. 

Market watchers had been with child the annual rate of housing starts to come in at 216,000 units  for August.

Ontario push the increase last month, with starts jumping to 95,000, broke Robert Kavcic, senior economist at BMO Capital Markets, leaving impress upon building in the province on pace for the most activity since 2003.

«This vestiges largely a [Greater Toronto Area] story, and still one of ample condo furnish, but a dearth of single-detached units,» Kavcic said in a commentary.

CMHC voted condominium apartment starts in Toronto approached a seasonally adjusted annual count of 36,000.

«The unprecedented pre-construction condominium apartment sales levels seen all about the past few years will ensure that high-rise construction stay puts strong in the near term,» CMHC said.

Michael Dolega, superior economist at TD, said the August report suggests that the Canadian shield market «remains quite strong after the wobble it suffered in the b quarter and the uncertainty of regulatory changes in Ontario and rising interest kinds.»

Dolega said last month’s report marks the second-best month this year while the six-month emotive average is nearing the 220,000 mark — the fastest pace since late-2012.

«All in all, we await Canadian housing starts to remain relatively healthy in the coming months, but start to trend lower as the effects of rising interest rates…and potential new usual…gradually take a bite out of demand,» he said.

Housing starts should mastery near the current levels in the next month or two, but trend towards the 200,000 smooth out into early-2018 and fall below that threshold the year after, Dolega mean.

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