Canadian housing starts hits six-month high
The annualised rate of Canadian housing starts has broken the 200,000 barrier for the first time this year
Data from national agency the Canada Mortgage and Housing Corporation showed construction of new houses was at a six-month high.
The seasonally adjusted, annualised rate of housing starts hit 200,178 in May – its fastest since November.
The rate of starts was up 14 per cent from April as the industry continued to defy expectations.
Fears were raised last year of overbuilding in key towns and cities while the global economy faltered.
The Organisation for Economic Cooperation and Development last month cut its growth forecast for Canada to just 1.4 per cent in 2013. Yet the housebuilders don’t appear phased.
Building of homes in urban developments of two or more properties rose 22 per cent to 114,346 units per year in May. This accounted for more than four-fifths of the overall rise in starts.
Ontario led the way with an annualised rate of 67,429 starts – up 21,375 from April.
The much smaller Atlantic region saw growth of 4,974 units per year to 9,425. But Quebec, the Prairies and British Columbia all saw drops in housing starts.
Because starts soared in May to levels last seen in November, which now drops off the six-month moving average, that figure remained relatively untouched.
CMHC deputy chief economist Mathieu Laberge said: ‘The trend in total housing starts was essentially unchanged in May as gains in the multiple starts segment partly offset the moderation in activity that was observed in previous months, especially in Atlantic Canada and Ontario.
‘As a result, the trend in housing activity remains close to its historical average and is in-line with estimates of household formation.’
Victor Smith, chief executive of Ingenium Groupwhich is the Canadian parent company of the UK firm Archial added: ‘The Canadian building market is currently experiencing some softness as part of a long term cyclical shift from the central provinces of Ontario and Quebec to the western part of the country (Alberta and British Columbia). The pace of both housing starts and of government expenditures has slowed as of late, although there are reports of renewed investments in national infrastructure commencing by the end of this year. This is assumed to include transit, roads and health care projects.
‘Alberta is perhaps the strongest market for construction activity at this time, restrained only by the shortage of locally available labour. Both private sector development (residential/retail/office) and direct and indirect support facilities for the oil and gas industry are very active.
‘British Columbia has seen a slowdown in condominium construction but major upgrades and expansion of the transportation network in the lower mainland, together with civil engineering projects related to new oil and gas pipelines in the northern part of the province, are sustaining momentum for those firms that have been able to adapt to changing circumstances’.