OTTAWA—The annual pace of housing starts in Canada slowed in August to 192,368 units, down from 199,813 in July, according to the Canada Mortgage and Housing Corp on Sept. 9.
The pace fell short of the 195,000 units forecast by analysts.
“The Bank of Canada may be looking for a rotation away from housing and the consumer, but low rates continue to support residential investment,” CIBC economist Nick Exarhos said in a report.
“But despite recent resiliency, we still expect housing’s contribution to growth to slowly wane as we progress through this business cycle, with affordability concerns and a weak labour market putting pressure on the building sector going forward,” he said.
“The currently elevated level of inventory of newly completed and unoccupied condominiums, and units under construction, supports CMHC’s view that condominium starts will likely see a declining trend over the coming months as developers and builders seek to limit risks of over-building,” CMHC chief economist Bob Dugan said.
Regionally, the seasonally adjusted pace of urban housing starts fell in Atlantic Canada and Ontario, while it picked up in British Columbia and the Prairies.
Urban home starts were essentially unchanged in Quebec compared with July.
The tick lower in the overall pace of housing starts followed a report Sept. 8 that municipalities issued $9.2 billion worth of building permits in July, driven higher in part by plans for apartment and condominium projects in Ontario and British Columbia.
The value of building permits issued was up 11.8 percent from June, and August was the fourth month in a row that the value has increased.
The housing market has been closely watched by the Bank of Canada.
In its recent interest rate announcement, the central bank noted the housing market has been “stronger than anticipated.”
