MNI DATA ANALYSIS: Aug Canada Housing Starts Fall To 201k

By Yali N'Diaye

     OTTAWA (MNI) - Canada housing starts declined to a seasonally adjusted

annual rate of 200,986 in August from 205,751 in July, the Canada Mortgage and

Housing Corporation reported Tuesday, against the backdrop of higher interest

rates and tighter macro prudential rules that have been in effect since the

beginning of this year.

     Analysts in a MNI survey had expected starts to rise slightly to 210,000.

     The six-month trend also declined further, to 214,598 from 219,656, after

reaching a record in March this year, mainly as a result of lower multi-unit

starts.

     Regionally, the country's two large markets, Vancouver and Toronto, showed

diverging trends.

     In Toronto, lower starts in condominium apartments and single-detached

homes weighed on the trend in August.

     Instead, Vancouver saw higher housing starts, led by multi-family projects

going under way. Vancouver, along with Burnaby, both in British Columbia,

accounted for more than half of the starts in August.

     "Demand for housing from residents remains strong and has resulted in the

pace of new home construction so far in 2018 moving ahead of the level recorded

during the first eight months of 2017," CMHC said.

     However, housing starts declined across all categories in August, including

single-detached homes, which recorded a decrease to 64,429 from 66,116.

     The data support the scenario of a slowdown in the third quarter expected

by the Bank of Canada.

     In July, building permits edged down 0.1%, following a 1.3% decrease in

June, suggesting more slowdown in construction activity, led by multi-family

dwellings.

     The Labor Force Survey showed that employment in the construction sector

was down 16,400 in August.

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

[TOPICS: MACDS$,M$C$$$]