Tuesday, December 9, 2008

Housing Starts Moderate in November

The seasonally adjusted annual rate of housing starts was 172,000 units in November, down from 211,800 units in October, according to Canada Mortgage and Housing Corporation (CMHC).

“The decrease in November housing starts can be attributed in part to the volatile multiple starts segment,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Still, housing starts in November remain consistent with our forecast which calls for more moderate activity of 212,000 units this year and 178,000 units next year. Note that at the beginning of the new millennium, Canada posted strong housing start levels given a pent-up demand that existed then. Over the last few years, this excess demand gradually decreased and our forecast for 2008 and 2009 reflects this new reality with housing starts, more aligned with long run demographic demand.”

The seasonally adjusted annual rate of urban starts decreased 21.6 per cent to 144,800 units in November. Urban multiple starts moderated 29.1 per cent to 81,700 units, while urban single starts eased 9.0 per cent to 63,100 units in November.

November’s seasonally adjusted annual rate of urban starts moderated in all regions of Canada. Urban starts declined to 17,900 units in British Columbia, 23,500 units in the Prairies, 54,700 units in Ontario, 41,100 units in Quebec, and 7,600 units in the Atlantic region.

Rural starts were estimated at a seasonally adjusted annual rate of 27,200 units in November.

For the first 11 months of 2008, actual starts in rural and urban areas combined moderated by an estimated 7.6 per cent, compared to the same period last year. Year-to-date actual starts in urban areas have decreased by an estimated 3.9 per cent over the same period in 2007. Actual urban single starts for the January to November period of this year were 18.4 per cent lower than they were a year earlier while urban multiple starts were up by 8.6 per cent over the same period.

CMHC December 8, 2008