Housing starts lower in July, fewer multiple-unit projects after busy June: CMHC

OTTAWA — Construction started on fewer multi-unit housing projects and single-family houses in July compared with June, but the pace of residential building remained high by historical standards, Canada Mortgage and Housing Corp. reported Thursday.

CMHC’s seasonally adjusted annualized rate of housing starts — one of the key indicators of residential building activity and future housing supply — dropped to 206,314 units in July, from 246,200 units in June.

Analysts said July’s pullback was bigger than expected but noted that the biggest impact was from multiple unit projects, which can be volatile over the short term, and remained relatively high by historical standards.

“All told, today’s report matches our expectation that starts will pull back closer to the more fundamentally supported 200k mark in the second half of 2018 as higher interest rates and regulatory changes continue to limit demand,” TD economist Rishi Sondhi wrote in a commentary.

Josh Nye, a senior economist at Royal Bank of Canada, wrote that last month’s pullback “was a bit larger than expected though it would be hard to call July’s housing starts weak.”

He noted that July’s decline was concentrated in multi-unit starts “but that component still came in only slightly below last year’s pace, which was a record high.”

Urban multiple-unit projects such as condos and apartments declined by 20.3 per cent from June to 136,231 units in July, while single-detached urban starts decreased by 3.6 per cent month-over-month to 53,862 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,221 units in July.

“Regionally, Ontario saw the biggest pullback in July, with starts cooling to 66k after jumping above 100k in the prior month (when) a wave of Toronto condos broke ground in June,” wrote BMO Capital senior economist Robert Kavcic.

He added that Quebec also pulled back but its 12-month average of just under 50,000 is the strongest in seven years, and other parts of the country continue to have “very robust” levels of residential construction.

Kavcic also noted that the Statistics Canada index of new home prices was up 0.1 per cent in June, the first monthly increase since February, largely due to the higher cost of materials.

Although Statistics Canada didn’t specify which construction materials were a factor in the price increase, it noted that the overall price of most types of softwood lumber were up about 34 per cent compared with June last year.

TD’s Sondhi observed that July also marked the first month in which retaliatory tariffs on steel and aluminum imports from the U.S. were in effect, which likely raised construction costs faced by Canadian builders last month.

Just Posted

Council raises concerns about cannabis smoke and health

Smoke Free Bylaw returns to Red Deer city council Sept. 4

Councillors want to represent Red Deer at AUMA

City council approves endorsement

Red Deer woman hopes stolen guitar will be returned

Stolen guitar belong to her late mother

Penhold climber’s death a reminder of the dangers of scrambling

He never returned from his Mount Smuts attempt on Aug. 12.

Children, elderly at risk as smoke from distant fires hangs over parts of B.C.

VANCOUVER — Thick smoke blanketing British Columbia communities far from any flames… Continue reading

WATCH: Medicine River Wildlife Centre opens new playground

The grand opening of the playground was Saturday morning

Alligator kills woman trying to protect her dog at resort

HILTON HEAD ISLAND, S.C. — A woman who often walked her dog… Continue reading

Patients redirected as water leak shuts down Edmonton hospital’s emergency room

EDMONTON — Ambulances are being redirected to other hospitals after a water… Continue reading

Parks Canada moves second bison bull that wandered out of Banff National Park

BANFF — Parks Canada says a second bison bull that wandered out… Continue reading

Lottery for parent sponsorship to be replaced, more applications to be accepted

OTTAWA — The Trudeau government is scrapping an unpopular lottery system for… Continue reading

Air Canada-led consortium signs deal to buy Aeroplan program from Aimia

TORONTO — A consortium led by Air Canada has reached a deal… Continue reading

Scheer going to India to ‘repair’ relationship after ‘disastrous’ Trudeau trip

OTTAWA — Six months after Prime Minister Justin Trudeau’s foreign policy prowess… Continue reading

Police chiefs want new data-sharing treaty with U.S. as privacy questions linger

OTTAWA — Canada’s police chiefs are pressing the Trudeau government to sign… Continue reading

Pope on sex abuse: “We showed no care for the little ones”

VATICAN CITY — Pope Francis issued a letter to Catholics around the… Continue reading

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