Canadian housing starts fell in August, according to figures released this morning by Canada Mortgage and Housing Corporation.
The figure dipped 6.6% to a four-month low of 180,300 annualized units in August. The decline in August follows the cumulative 3.4% decrease recorded over the previous two months and further unwinds the 13.9% surge in May to a recent peak of 199,900 annualized units.
CMHC adds the pullback in home building in August, which compared to market expectations for a more modest decline to 190,000 reflected lower levels of activity in all components. Urban multiple-unit starts fell 8.4% to a four-month low of 104,700 annualized units while urban single-unit starts slipped 0.9% to 58,400 annualized units, the lowest level since June 2009. Rural starts fell 13.2% to 17,200, largely reversing the previous month’s 16.1% jump.
"Despite the monthly gyrations," experts at RBC Economics opined this morning, "new home construction has been fairly stable thus far through 2013 and the six-month moving average of starts (which the CMHC defines as the trend rate) came in at 187,200 in August versus 187,300 in July.
"As we move toward 2014," the bank concludes, "our expectation is that a modest deterioration in housing affordability will weigh on demand and lead to a moderation in starts. We expect housing starts will drift lower over the next year and finish 2014 at levels that are more consistent with household formation in Canada."
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