Housing Starts Decreased in August as Expected

Monday, September 11, 2006

OTTAWA, Sept. 11 /CNW Telbec/ - The seasonally adjusted annual rate(1) of housing starts was 213,700 units in August, down from 236,500 units in July, according to Canada Mortgage and Housing Corporation (CMHC).

"Housing starts decreased in August solely due to a decline in the multiple starts segment. After three consecutive months of increases, the volatile multiple starts segment dropped to its lowest level of the year in August." said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "Single-detached starts moved higher from their lackluster performance in July, but not markedly so."

The seasonally adjusted annual rate of urban starts declined 11.3 per cent to 179,300 units in August compared to July. Urban multiples decreased 22.2 per cent to 87,800 units in August, while singles were up 2.6 per cent to 91,500 units.

Urban housing starts decreased in four out of five regions in August compared to July. Double digit declines were recorded in British Columbia, Ontario, the Atlantic region, and the Prairie region where urban starts were down 21.2, 19.8, 18.0, and 10.0 per cent respectively. Urban starts were up 19.6 per cent in Quebec.

Rural starts in August were estimated at a seasonally adjusted annual rate of 34,400 units.

"Total starts for the first eight months of this year remained ahead of last year's pace. However, strong house price gains will continue to dampen demand for new homes in the latter part of this year," Dugan said.

For the first eight months of 2006, all areas' actual starts increased 2.7 per cent compared to a year ago, which compares to 2.0 per cent growth in actual urban starts over the same period. Year-to-date actual urban multiple starts rose 2.8 per cent and urban singles were up 1.1 per cent compared to the same period in 2005.

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