Canadian housing starts slowed in December after a spectacular gain in the previous month. Even with the month-over-month decline, 2017 marked one of the strongest years in residential construction in nearly a decade.
Housing starts fell 13.8% in December to a seasonally adjusted annualized rate of 216,980, down from a revised 251,675 units in the previous month, Canada Mortgage and Housing Corp. said Tuesday. Market expectations were for starts to come in at 212,500, according to economists at Royal Bank of Canada.
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This trend measure, or a six-month moving average of the monthly seasonally adjusted annual rates of housing starts, was largely unchanged in December at 226,777.
"Despite the variation in activity across the country, the national trend in housing starts held steady at its highest level since 2008," Bob Dugan, CMHC's chief economist, said in a statement accompanying the data.
Mr. Dugan said total urban housing starts in 2017 rose 6.2% compared with 2016, due largely to the construction of condominium and apartment units.
Bank of Nova Scotia's economics team said starts were elevated due to supply shortages and solid demand, particularly given elevated housing price levels in the Vancouver and Toronto-area markets. Higher immigration and strong labor markets in Vancouver and Toronto also helped underpin construction activity.
Analysts expect housing starts to cool in 2018, as interest rates head higher and tougher mortgage-financing rules begin to weigh on house-buying decisions.
CMHC said that in December, urban starts fell 15.1% to 198,132 units. Multiple urban starts, incorporating condos and townhouses, decreased 22% to 135,176 units, whereas construction on single-detached homes rose 4.7% to 62,956 units. Rural starts were estimated at a seasonally adjusted annual rate of 18,848 units.
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(END) Dow Jones Newswires
January 09, 2018 09:32 ET (14:32 GMT)