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Free AccessCanada Sept Housing Starts -4.0% M/M to 217.1k, Above Expected
--Decline Still Above Analyst Expectations
By Courtney Tower
OTTAWA (MNI) - Canadian housing starts fell 4% in September from August to
a seasonally adjusted annual rate of 217,118, although new home construction
remained "very strong," Canada Housing and Mortgage Corporation reported
Tuesday.
The September performance was still better than expected by analysts in a
MNI survey, who had anticipated starts to come in at 210,000.
On the six-month trend basis preferred by CMHC as a more reliable guide to
performance, starts in September were also down, to 214,821 compared with
220,573 in August.
The lower trend broke eight consecutive months of increases, Bob Dugan,
CMHC chief economist, said in the Corporation's news release.
"Nevertheless," he added, "new home construction remains very strong as the
seasonally adjusted number of starts (month-over-month) was above 200,000 units
for four straight months."
Urban starts declined in September by 5.1% to 198,910 units, while rural
starts were estimated at 18,208 units.
Multiple urban starts decreased by 10.7% to 131,388 units in September,
while single detached urban starts rose by 8.2% to 67,522 units.
For the Toronto census metropolitan area (CMA), CMHC said total housing
starts were 7% down in September from August, "led by lower apartment starts."
CMHC said monthly variations in high-rise starts "are typical given delays in
getting large-scale projects off the ground." Low-rise starts "remained strong."
New home building in Toronto overall "remains stable as strong demand for new
homes in the Toronto CMA continues to persist."
In the Vancouver CMA, Canada's other large market and for years very hot,
fewer multi-family units were started. CMHC attributes that to the high level of
starts over the past year creating a record number of units now under
construction and little capacity left for additional projects.
However, new home construction in the area "is being supported by
population growth, a strong local economy, and low financing costs," CMHC said.
Year-over-year, the Toronto area recorded a 16% rise in September over
September last year. Vancouver, on the other hand, was down 49% with 1,573
starts compared with 3,090 in September last year.
In the province of Alberta, hit by collapsing oil prices and large job
losses in that industry, Calgary's starts dropped 24% in September from
September a year ago. In the capital city, Edmonton, on the other hand, starts
were up 32% from a low number the previous September. In the other chief oil
provinces, Saskatchewan (-22% year-over-year) and Newfoundland and Labrador
(-23%) the oil effects linger.
Over the country as a whole starts in the four Atlantic provinces in
September were just up 4% over September a year ago. In the three Prairie
Provinces (Alberta, Saskatchewan, Manitoba) they rose only 2%. Ontario was up
13% and British Columbia down 18%, while Quebec was up 5%.
Analysts responses to the September decline were positive.
"Despite the drop in September, Canadian residential construction remains
at a level that is higher than demographic needs (estimated to be around 190K),"
said the CIBC. "Builders were motivated due to solid demand that was fueled in
Q3 by a solid labor market and low interest rates."
For the National Bank, "the contribution from new home construction should
remain reasonably firm, as the deluge of new projects commenced in 2017 are seen
through to completion. All told, not much to change our story on housing, or the
Canadian outlook with today's figures."
--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com
[TOPICS: MACDS$,M$C$$$]
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.