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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$$$]

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