Pace of new homes declines in Canada

The seasonally adjusted annual rate of 184,700 homes started in August was down 9.7% from 204,500 starts in July. Bloomberg had reported a poll of economists had expected the August figure to be at 200,000.

Of the five Canadian regions, only the Prairies showed any positive gains in housing starts, rising 9.4% from 31,800 in July to 34,800 in August. While still down about 18% from the same eight-month period last year, Calgary totalled 1,237 units in August, up 44.2% from the 858 units in August 2010.

Winnipeg saw the most housing starts in any August since 1989, with 231, up 7.9% from the 214 in August 2010. In Edmonton, the highlight was the multi-family market, where the 311 starts in August were up 82% from the 171 in August 2010. For the seasonally adjusted annual rate, overall starts were up 16.7% to reach 850 from the 650 in July.

But outside of the Prairies, all other parts of Canada saw declines in urban starts. The biggest drop was in the Atlantic region, where the seasonally adjusted August total of 7,800 was down 41.3% from July’s 13,300. British Columbia and Ontario also saw double-digit declines over the same time period, down 15.3% and 11.9% respectively. Quebec was down 8.8%.

Still, the results were not beyond the expectations of Matthie Laberge, deputy chief economist with CMHC’s Housing Market Outlook.

“Housing starts in August were in line with current demographic fundamentals and are consistent with CMHC’s recent Housing Market Outlook,” he said.

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