Housing starts continue to moderate

Investors who have noticed a lack of inventory in many Canadian cities will not be reassured by new figures released by the Canada Mortgage and Housing Corporation (CMHC) today.

Following its forecast last week that housing starts would fall by one per cent in 2015, CMHC’s figures for January 2015 show housing starts in Canada have dipped to 188,956 units, compared to 191,627 in December.

In its forecase for 2015, the organization said it expected housing starts to fall to a range between 154,000 and 201,000 units. In 2016, it expects housing starts to stagnate between 148,000 and 203,000 units.

“The trend in total housing starts has been moderating since September 2014, reflecting lower trends in both multiple and single-detached starts,” said Bob Dugan, CMHC’s chief economist.

“Overall, economic and demographic factors remain supportive of housing demand. The moderation in new home construction reflects inventory management by builders and is in line with CMHC’s expectations.”

CMHC also released its seasonally adjusted annual rates (SAAR), which were up slightly, from 179,637 units in December to 187,276 in January.

The increase was led by multiple urban starts, which increased to 115,008 units in January from 102,384 in December, while single-detached urban starts decreased to 57,314 units from 59,556.

Urban housing starts saw relatively large gains in Atlantic Canada and the Prairies, while urban housing starts registered a modest gain in Ontario and declines in British Columbia and Québec.

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