CMHC Says Housing Starts Have Dropped In Recent Months

Statistics continue to show that Canada’s housing figures are drastically dropping as the construction of multiple units – normally condos – dropped by 13.3 per cent after an unexpectedly large gain last month. This data was relayed by the national housing agency.

According to a report from Canada Mortgage and Housing Corp, the seasonally adjusted annualized rate of housing starts dropped to 198,395 last month. Up to 195,000 starts were predicted by analysts in July.

The report also indicated that the expected fallback in housing starts within the county was broadly based, with groundbreaking new detached homes dropping more than 1.8%, as well as starts in all parts of Canada being affected except Prairies.

Both of the country’s hottest housing markets, Toronto and Vancouver, have expressed some concern regarding the housing bubble.

“Housing prices might be a bubble in some Canadian cities, but July data show that starts and construction rest on a firmer foundation tied to population growth and demand,” CIBC World Markets chief economist Avery Shenfeld said in a research note.

The six-month trend of housing starts climbed up to 201,936 last month, following a strong pace in the real estate industry which, over the years has backed the country’s economy.

From the beginning of this year, starts are at a pace of 198,000 units, according to a survey conducted by BMO Capital Markets economist Robert Kavcic, who called the clip “firm but not out of whack with overall demographic demand.”