Hous­ing starts picked up in Oc­to­ber

CMHC saw an in­crease in multi-unit projects that pushed the pace of hous­ing starts higher

The Standard (St. Catharines) - - Business -

OT­TAWA — An in­crease in mul­tiu­nit projects such as con­do­mini­ums, apart­ments and town­houses helped push the an­nual pace of hous­ing starts in Oc­to­ber higher, Canada Mort­gage and Hous­ing Corp. said Thurs­day.

The hous­ing agency said the sea­son­ally ad­justed an­nual rate of hous­ing starts last month came in at 205,925 units, up from 189,730 in Septem­ber.

Economists had ex­pected an an­nual rate of 200,000, ac­cord­ing to Thom­son Reuters Eikon.

CMHC said the six-month mov­ing aver­age of the monthly sea­son­ally ad­justed an­nual rates was 206,171 in Oc­to­ber, down from 207,809 in Septem­ber.

BMO Cap­i­tal Mar­kets se­nior economist Sal Gu­atieri said the hous­ing mar­ket con­tin­ues to sta­bi­lize af­ter get­ting dinged by tougher mort­gage rules ear­lier this year, and re­mains healthy de­spite higher in­ter­est rates.

“The re­port con­firms that na­tional hous­ing con­struc­tion, though slow­ing, re­mains healthy and above long-run house­hold for­ma­tion rates, sup­ported by solid de­mo­graphic trends,” Gu­atieri wrote in a brief re­port.

How­ever, CIBC economist Royce Men­des noted the growth was due to the mul­ti­ples com­po­nent.

“The fact that head­line starts rose on the month is still a pos­i­tive for track­ing es­ti­mates of the econ­omy,” Men­des wrote.

“But given that it came on the back of an in­crease in mul­ti­ples cou­pled with a drop in sin­gles, means that the lat­est read­ing on starts may not prove sus­tain­able. We still see the cock­tail of tighter lend­ing rules and higher in­ter­est rates as caus­ing hous­ing ac­tiv­ity to be­come a drag on the econ­omy come 2019.”

The growth in hous­ing starts in Oc­to­ber came as the an­nual pace of ur­ban starts climbed by 8.6 per cent to 191,964 units.

The an­nual rate of ur­ban mul­ti­ple-unit projects in­creased by 16.8 per cent to 145,442 units. Ur­ban starts for sin­gle-de­tached homes fell 10.7 per cent to 46,522 units. Ru­ral starts were es­ti­mated at a sea­son­ally ad­justed an­nual rate of 13,961 units.

Ear­lier this week, CMHC said it ex­pected the real es­tate mar­ket to mod­er­ate over the next two years.

In its an­nual out­look, the agency fore­casted hous­ing starts and sales to both de­cline in 2019 and 2020.

It ex­pects hous­ing starts for sin­gle and multi-unit starts will fall to be­tween 193,700 and 204,500 in 2019.

SEAN KIL­PATRICK THE CANA­DIAN PRESS

Economist Sal Gu­atieri said the hous­ing mar­ket con­tin­ues to sta­bi­lize af­ter get­ting dinged by tougher mort­gage rules ear­lier this year.

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