Home construction picks up in July
OTTAWA — Home construction in Canada picked up last month, driven by British Columbia and Alberta, defying expectations that homebuilding activity would cool down.
The seasonally adjusted annual rate of housing starts rose to 222,324 units in July, up from 212,948 in June, Canada Mortgage and Housing Corp. said Wednesday.
In Hamilton, the seasonally adjusted annual rate was also up month-over-month, rising to 2,909 units in July from 2,142 in June.
Local builders started fewer housing units in July of this year, 256, compared with 380 in the same month last year.
Nationally, the ramp-up in starts likely reflects strong demand for new housing from the end of last year into the start of this year, TD Bank economist Diana Petramala said, adding that the new construction market tends to lag real estate demand, which has started to fall.
Petramala said regulatory changes over the past year including tougher mortgage qualification rules have prompted a shift for some first-time homebuyers from existing homes to cheaper, newly built dwellings.
“Some of the momentum could potentially carry forward into the second half of the year before new home construction eases along with the existing home market next year,” she said.
Last month, the Canadian Real Estate Association reported that national home sales figures in June posted their largest monthly drop in seven years. The association is expected to release July sales data next week.
Regionally, the annual pace of housing starts in B.C. surged 20 per cent compared with June while Alberta saw an eight per cent increase. The annual pace of starts in Ontario was up one per cent.