Canada Aug Housing Starts Beat Expectations On 'Strong' Demand

By Yali N'Diaye

     OTTAWA (MNI) - Canadian housing starts rose 0.6% in August to a seasonally

adjusted annual rate of 223,232, beating analysts' expectations in a MNI survey

that had centered on 212,000, according to data released Monday by Canada

Mortgage and Housing Corporation.

     The six-month trend continued to increase by 1.0% over the month to 219,447

after a 1.1% gain in July, remaining above 200,000 for the eighth consecutive

month.

     "Demand for new homes remains strong, consistent with consumer confidence

which reached its highest level in 10 years," said CMHC Chief Economist Bob

Dugan.

     While housing starts were down 2.8% in rural areas, they rose 0.8% in urban

centers, resulting from "a lot of volatility" at the provincial level.

     Within urban centers, single-detached home starts fell 3.2% on the month,

while multiple starts rose 2.7%.

     A nearly 21% gain in Ontario housing starts was partly offset by declines

in British Columbia (-21.3%) and in Atlantic provinces (-24.2%).

     In Toronto, housing starts were up nearly 22% to 53,656, lifting the trend

8%.

     "The positive market sentiment towards condominium apartments in Toronto

translated into stronger pre-construction sales, and subsequently into new

housing starts," the report said. "The unprecedented pre-construction

condominium apartment sales levels seen over the past few years will ensure that

high-rise construction remains strong in the near term."

     In Vancouver, Canada's other large market, SAAR starts declined to 20,931

from 27,934.

     "Alongside consumer spending, residential investment has been a key

surprise for growth this year and these data suggest that new construction will

remain supportive for GDP," CIBC analyst Andrew Grantham said in a commentary. 

     TD economist Michael Dolega also expects "relatively healthy" starts in

months ahead.

--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com

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