Annual pace of housing starts slips in May

OTTAWA — The annual pace of Canadian housing construction slipped more than expected last month as builders in Ontario broke ground on fewer new homes following changes in the province’s real estate rules.

The Canada Mortgage and Housing Corp. said Thursday the seasonally adjusted annual rate of housing starts fell to 194,663 units in May, down from 213,498 in April.

Economists had expected the rate to come in at 205,000, according to Thomson Reuters.

Benjamin Reitzes, the Canadian rates and macro strategist at BMO Capital Markets, noted the pace of housing starts in Toronto fell 44.4 per cent compared with April.

“Don’t be surprised if activity remains subdued for at least a few more months as the housing market digests the changes,” Reitzes wrote in a report.

In April, the Ontario government announced 16 measures as part of an effort to cool the Toronto real estate market, including a tax on foreign buyers and expanded rent controls.

In May, the first full month following the changes, Toronto home sales fell 20.3 per cent compared with a year ago as the number of new listings climbed.

“The surge in existing home supply we’ve seen over the past two months could also help restrain home building activity as buyers have more choices,” Reitzes wrote.

The overall drop in Canadian new home starts in May came as the pace of urban starts fell 10.2 per cent to 178,518. Multiple-unit urban starts dropped 10.8 per cent to 118,694, while single-detached urban starts fell 8.9 per cent to 59,824.

The seasonally adjusted annual rate of rural starts was estimated at 16,145 units.

The six-month moving average of the monthly seasonally adjusted annual rates rose to 214,621 in May compared with 213,435 in April.

TD Bank senior economist Michael Dolega said the apparent cooling-off in Ontario residential construction is likely to be somewhat offset by a stronger pace of homebuilding in recovering markets across Canada.

“Taken together, we expect housing starts in Canada to continue along their current trajectory and settle closer to 200,000 later this year and slightly below that level into 2018,” Dolega wrote.

“Toronto’s market and its response to the new rules remains a key risk to this outlook, particularly in a rising interest rate environment which could also pressure prices and homebuilding activity in other parts of the country.”

In a separate report, Statistics Canada said prices for new homes rose 0.8 per cent in April, led by higher prices in Toronto and Vancouver.

The new housing price index for Toronto climbed 2.1 per cent for the month, while new house prices in Vancouver gained 1.2 per cent. Compared with a year ago, the new housing price index was up 3.9 per cent, led by Toronto.

Craig Wong, The Canadian Press

Just Posted

Notley pleads with political foes, allies to support Alberta pipeline projects

OTTAWA — Alberta Premier Rachel Notley issued warnings to all political parties… Continue reading

Accused murderer takes stand

Jason Klaus said he had no idea his family would be killed by Joshua Frank

St. Patrick’s school modernization could include asbestos removal

Red Deer Catholic Regional Schools have told staff, students and parents connected… Continue reading

Campaign renews push to make Bighorn Backcountry a wildland provincial park, ATV groups unhappy

A push to provide provincial protection for the Bighorn Backcountry area has… Continue reading

Providing more services while keeping taxes low is Blackfalds’ dilemma

Town has undergone years of above-average growth

VIDEO: Replay Red Deer: Nov. 19

Watch news highlights from the week of Nov. 13

Creationist will speak at home-schooling convention in Red Deer

Ken Ham has debated Bill Nye on the Earth’s origins

Update: Innisfail girl found

A 15-year-old missing Innisfail girl has been located safe and sound. Police… Continue reading

Cost to fix Phoenix pay system to surpass $540 million, auditor general says

The federal government’s chronic salary struggles will take more time and more… Continue reading

Red Deer Christmas Bureau to help 1,300 children this year

Demand is high, but Red Deer always provides

CP Holiday train makes stops in Central Alberta

The popular train will feature entertainment from Colin James and Emma-Lee

Kittens rescued after allegedly being tossed from vehicle

Couple finds abandoned kittens new home through Facebook

VIDEO: ‘Party bus’ goes up in flames in Vancouver

Fire crews responded to the late night blaze

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month