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Canada: Housing starts inch up to seven-month high

June 10, 2014

Seasonally-adjusted annualized housing starts registered 198,300 units in May according to the government-owned Canada Mortgage and Housing Corporation (CMHC). The figure marked a modest 0.8% increase over April’s 196,700 units and came in above market expectations of 185,000 units. May’s print represents the highest number of new housing starts since October of last year.

The six-month moving average rose 0.3% over the previous month, increasing from 183,900 units in April to 184,400 in May. The CMHC noted that the very moderate decline in the trend in housing starts, “is in line with CMHC’s analysis indicating that the new home construction market in Canada is headed for a soft landing in 2014.” Furthermore, the CMHC stated that, “[b]uilders are expected to continue to manage their starts activity in order to ensure that demand from buyers seeking new units is first channeled toward unsold completed units or unsold units that are currently under construction, including condominium units.”

According to its Q2 Housing Market Outlook, the CMHC estimates that housing starts will moderate to 181,100 units in 2014 and reach 182,100 units in 2015. FocusEconomics Consensus Forecast participants expect 180,110 housing starts in 2014. For 2015, the panel sees housing starts moderating to 175,030 units.


Author: Teresa Kersting, Economist

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Canada Housing Chart


Canada Housing Starts May 2014

Note: Monthly housing starts at seasonally-adjusted annualized rate.
Source: Canada Mortgage and Housing Corporation (CMHC).


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