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Canada: 222.7K Housing Starts In June

ByThe National Bank of Canada
Published 07/11/2012, 05:57 AM
Updated 05/14/2017, 06:45 AM
IMOB
-0.77%
NOTE
-0.96%
Facts:

In Canada, for a seventh month in a row, housing starts exceeded 200K units at an annual rate in June (top chart), reaching 222.7K, or 2.4% over the upwardly revised 217.4K units started in May. In June, urban starts increased 5.0K or 2.6% to 199.5K. Starts in rural areas edged up 300 units, or 1.3%, to 23.2K. Urban single family starts edged down 200 units, or -0.3%, to 67.5K, while multiple starts increased 5.2K or 4.1% to 132.0K. On a regional basis, starts increased in seven provinces out of ten, the largest increases occurring in Quebec (+6.1K), BC (+8.2K) and Saskatchewan (+3.9K). Starts declined 7.2K from an abnormally high level in Manitoba, and 7.0K in Ontario.Starts in June above 200K for a seven month in a row
Opinion: June’s increase in housing starts mainly comes from an increase in multiple starts in Vancouver and in Quebec outside the Montreal Census Metropolitan Area (in the latter case, after a somewhat low level in May). With the Real Estate Board of Greater Vancouver reporting that the resale market favoured buyers in June, there is no reason to believe that multiple starts will remain high in that area. We note that multiple starts in Toronto remained at a sustainable level for a second month in a row, after very high levels reached in March and April (middle chart). We still expect the pace of housing starts to moderate as the year progresses, now that mortgage rules have been tightened. With the prospect of interest rate increases in the middle of next year, housing starts should continue to moderate in 2013. Meanwhile, in Q2, new housing construction made its largest contribution to economic growth since the last quarter of 2009 (bottom chart).
Multiple starts return to a normal level
Contribution to economic growth in Q2

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