Housing starts, prices show more signs of slowing
Canada's housing industry showed more signs of softening amid reports of easing summer construction starts and slowing price increases for new homes.
Canada Mortgage and Housing Corp. said Monday that the seasonally adjusted annual rate of housing starts in July was 186,500 units, down from 215,900 in June.
Starts of urban multiple units, such as condominiums, dropped 20.2 per cent to 91,600, while starts of urban single homes eased 6.6 per cent to 69,800 units.
"After a strong first half of the year, the volatile multiple segment is now readjusting itself," said Brent Weimer, a senior economist at CMHC's market analysis centre. "This brings activity since the start of the year closer in line with our 2008 forecast of more than 200,000 housing starts for the seventh consecutive year."
TD Bank economist Pascal Gauthier said that while the figures for July are disappointing, "one should not read too much into an oversized drop in multiple starts in a single month."
"The month-to-month volatility in this market segment is remarkably high on both the upside and downside," Gauthier said. "The trend in single starts is usually more telling, and it remains consistent with our theme for this sector of the Canadian economy, which is that it should experience a cooling after running too hot for too long."
Meanwhile, Statistics Canada also reported Monday that new housing prices in June increased at their slowest pace in over six years. That continued a slowdown that started in September 2006, the federal government agency said.
The June decline reflected a softening housing market in Western Canada, Statistics Canada said.
Across the country, contractors' selling prices rose 3.5 per cent between June 2007 and June 2008. That was down from the 4.1 per cent year-over-year increase in May.
The June increase was the slowest rate of growth since March 2002 when year-over-year prices increased by 3.4 per cent.
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