Canadian Housing Starts Decline in May -- Update

By David George-Cosh Features Dow Jones Newswires

Canadian housing starts fell in May, the second-straight monthly decline, as recent moves to curb elevated house-price gains in the Toronto-area market reverberated in the city's overall property market.

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Housing starts declined 8.8% to a seasonally-adjusted rate of 194,663 units in May, Canada Mortgage and Housing Corp. said Thursday. Market expectations were for a rise to 202,000, according to economists at Royal Bank of Canada.

CMHC said the previous month's figures were revised slightly lower, and now show seasonally-adjusted housing starts of 213,498 for April.

The May figures represent the first time in six months that housing starts fell below the 200,000 mark on a seasonally adjusted basis. Much of the declines were centered around the Toronto-area, which reported nearly a 50% drop in housing starts in the month.

Single-detached home starts in Canada's biggest city fell for the first time since September 2016 as a "noticeable increase" in home listings in the resale market provided added choice to home buyers, the housing agency said.

In April, Ontario introduced a number of measures aimed at cooling skyrocketing home-price gains in the Toronto-area market, including a surtax on foreign buyers.

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The CMHC has previously said that the recent house prices gains in the Toronto region of 30% and over on an annualized basis couldn't be justified by economic fundamentals.

The monthly decline below the 200,000 housing starts figures is consistent with the recent moves in permits issuances for new dwelling units in Canada, said Derek Holt, economist at Bank of Nova Scotia.

CMHC's May report said urban housing starts fell 10.2% to 178,518 units on a seasonally-adjusted basis. Multiunit urban starts, which includes condominiums, declined 10.8% to 118,694 units, while single-detached starts in urban centers dropped 8.9% to 59,824 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,145 units.

Write to David George-Cosh at david.george-cosh@wsj.com

Canadian housing starts fell in May, the second-straight monthly decline, as recent moves to curb elevated house-price gains in the Toronto-area market reverberated in the city's overall property market.

Housing starts declined 8.8% to a seasonally-adjusted rate of 194,663 units in May, Canada Mortgage and Housing Corp. said Thursday. Market expectations were for a rise to 202,000, according to economists at Royal Bank of Canada.

CMHC said the previous month's figures were revised slightly lower, and now show seasonally-adjusted housing starts of 213,498 for April.

The May figures represent the first time in six months that housing starts fell below the 200,000 mark on a seasonally adjusted basis. Much of the declines were centered around the Toronto-area, which reported nearly a 50% drop in housing starts in the month.

Single-detached home starts in Canada's biggest city fell for the first time since September 2016 as a "noticeable increase" in home listings in the resale market provided added choice to home buyers, the housing agency said.

In April, Ontario introduced a number of measures aimed at cooling skyrocketing home-price gains in the Toronto-area market, including a surtax on foreign buyers.

The CMHC has previously said that the recent house prices gains in the Toronto region of 30% and over on an annualized basis couldn't be justified by economic fundamentals.

Canadian new house prices climbed 0.8% in April on a month-over-month basis led by outsize gains in Toronto, Statistics Canada said Thursday. New-house prices in the country's biggest city were up 2.1%.

Canadian new house prices climbed 0.8% in April on a month-over-month basis led by outsize gains in Toronto, Statistics Canada said Thursday. New-house prices in the country's biggest city were up 2.1%.

The monthly decline below the 200,000 housing starts figures is consistent with the recent moves in permits issuances for new dwelling units in Canada, said Derek Holt, economist at Bank of Nova Scotia.

CMHC's May report said urban housing starts fell 10.2% to 178,518 units on a seasonally-adjusted basis. Multiunit urban starts, which includes condominiums, declined 10.8% to 118,694 units, while single-detached starts in urban centers dropped 8.9% to 59,824 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,145 units.

Write to David George-Cosh at david.george-cosh@wsj.com

(END) Dow Jones Newswires

June 08, 2017 09:56 ET (13:56 GMT)