Canada: Housing starts ease in August, but remain upbeat
Housing starts ticked down to 260,239 units on a seasonally-adjusted annualized rate (SAAR) basis in August according to the Canada Mortgage and Housing Corporation (CMHC), from July’s 270,744-unit reading. August’s slight fall was driven by a dip in single-detached urban starts, while multi-urban starts also fell over the previous month.
Meanwhile, the six-month average of housing starts in urban areas fell to 283,971 units in August from 286,076 units in July.
Commenting on the latest print, Royce Mendes, senior economist at CIBC World Markets, noted:
“Residential construction activity appears to have peaked in April and has continued to decline since the midpoint of the year, suggesting that third quarter GDP data will see a drag from that component of the economy. A weak residential investment reading would come after a slowdown in unit home sales saw transfer costs already push the that category of GDP significantly into negative territory in the second quarter. The cooling off in housing isn’t all bad news, though, with concerns of a significantly overheated market abating at least temporarily.”