Pace of Cana­dian hous­ing starts falls in De­cem­ber

The Prince George Citizen - - Worklife - Linda NGUYEN

The an­nual pace of hous­ing starts dropped in De­cem­ber, but re­main at an “el­e­vated” level when com­pared with his­tor­i­cal av­er­ages, Canada Mort­gage and Hous­ing Corp. said Wed­nes­day.

The na­tional hous­ing agency re­ported the sea­son­ally ad­justed an­nual rate of hous­ing starts in Canada was 213,419 units in De­cem­ber, down from 224,349 in Novem­ber.

The re­sult beat an­a­lysts ex­pec­ta­tions of an an­nual rate of 205,000, ac­cord­ing to pro­jec­tions by Thom­son Reuters Eikon.

“To­tal an­nual hous­ing starts in 2018 were lower than in 2017, as lower sin­gle-de­tached starts more than off­set a slight in­crease in multi-fam­ily starts this year,” said Bob Du­gan, CMHC’s chief econ­o­mist in a state­ment Wed­nes­day.

“None­the­less, to­tal hous­ing starts re­main el­e­vated when com­pared to his­tor­i­cal av­er­ages.”

CMHC said pre­lim­i­nary fig­ures, which are sub­ject to re­vi­sion, show that there were a to­tal of 214,020 hous­ing starts in 2018 ver­sus 219,763 in 2017. It had pre­vi­ously pre­dicted that hous­ing starts would range be­tween 192,200 to 203,000 for 2018.

CIBC said the mild win­ter tem­per­a­tures made con­di­tions more con­ducive for home­build­ing in De­cem­ber, but noted that hous­ing starts will likely be af­fected by ris­ing in­ter­est rates and tighter mort­gage rules.

“But the re­cent mo­men­tum com­bined with the de­cent read­ings on build­ing per­mits sug­gest that hous­ing con­struc­tion could hold up in the near-term,” said CIBC se­nior econ­o­mist Royce Men­des in a state­ment.

Nathan Janzen, se­nior econ­o­mist at Royal Bank, agreed that hous­ing starts will likely ease up in 2019 and fol­low the down­ward tra­jec­tory of home sales. He an­tic­i­pates hous­ing starts to hover around the 194,000 mark this year.

“That would still be a rel­a­tively strong pace of build­ing ac­tiv­ity his­tor­i­cally and labour mar­kets in Canada still look quite solid,” he wrote in a re­port.

“Lower oil prices, though, are hav­ing an im­pact on growth in oil-pro­duc­ing re­gions and ques­tions have emerged about the dura­bil­ity of the global eco­nomic ex­pan­sion. At the same time, slower hous­ing mar­kets and slower growth in house­hold debt has ar­guably re­moved some of the ur­gency for the Bank of Canada to hike in­ter­est rates in the very near-term.”

On Wed­nes­day, the Bank of Canada left its trend-set­ting in­ter­est rate un­changed at 1.75 per cent amid a dim­mer eco­nomic out­look in the com­ing months due to a plung­ing oil price and a slow­ing hous­ing mar­ket.

CMHC re­ported that the an­nual pace of ur­ban starts dropped by 5.8 per cent to 194,594 units in De­cem­ber as the an­nual rate of mul­ti­ple-unit projects such as con­do­mini­ums, apart­ments and town­houses fell 6.8 per cent to 144,728 units.

The pace of sin­gle-de­tached ur­ban starts fell by 2.5 per cent to 49,866 units.

Ru­ral starts were es­ti­mated at a sea­son­ally ad­justed an­nual rate of 18,825 units.

CP FILE PHOTO

A new home un­der con­struc­tion in June 2018 in North Van­cou­ver is shown.

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