The latest report from the Canadian Mortgage and Housing Corp, released Tuesday, showed the seasonally adjusted annualized rate of housing starts fell to 193,032 in July from a downwardly revised 202,338 units in June.
With the six-month trend at 185,586 starts, analysts said homebuilding has settled into a pace that meets demographic demand, seemingly unaffected by the low oil prices and economic drag felt in many other sectors.
Canada Housing Starts, July
The CMHC report showed a 5.9 per cent drop in Canada’s urban housing starts, which make up the bulk of construction activity, with multiple starts — typically condos — down 8.2 per cent and single-detached home starts down a more modest 0.8 per cent.
Regionally, British Columbia showed the only gain in new housing starts.
The rate of home construction remains above a low of 151,387 set in February, fueled by job gains and some of the lowest mortgage rates in decades. The resilience of the market in a year when exports and business spending have been roiled by an oil shock suggests renewed increases are possible in the next few months, according to David Tulk, chief Canada macro strategist at Toronto-Dominion Bank’s TD Securities unit.
“With the Bank of Canada expected to remain quite accommodative, we see further momentum in both sales and construction through the second half of the year,” Tulk wrote in a research note.