Canada: Housing starts rebound in May
June 8, 2011
The Canadian housing market experienced a healthy expansion in May after shrinking in April. According to the government-owned Canada Mortgage and Housing Corporation (CMHC), seasonally adjusted annualised housing starts increased to 183,600 units in May, up 2.7% from a revised 178,700 units in April (previously reported: 179,000 units). The reading came in below market expectations that anticipated housing starts to increase 185,000 units in May. According to CMHC, a moderate increase in housing starts in May mainly reflected a rise in rural starts as well as in multiple constructions. Nevertheless, the modest May increase does not point to a reversal in the downward trend in housing starts, which have gradually declined since April 2010 when starts were seen at 205,600 units. Due to the sensitivity of housing starts to changes in the business cycle, increasing starts bode well for solid economic growth in the months ahead. The CMHC estimates housing starts will total 177,600 units in 2011 and 183,800 units in 2012.