Canadian Housing Starts Cool in January: CMHC
Canadian housing starts cooled in January, as homebuilders scaled back construction activity amid stabilizing demand.
Housing starts slowed in January to a seasonally adjusted pace of 180,248, the Canadian Mortgage and Housing Corporation reported today. Housing starts in December were downwardly revised from 189,672 units to 187,144 units.
Urban starts decreased 2.7 percent, led by a 6 percent drop in multi-dwelling units. Single-family starts, meanwhile, rose at a seasonally adjusted rate of 3.4 percent, CMHC reported. Housing starts increased in Ontario and the Prairies, but declined in Quebec, British Columbia and the Atlantic.
“The trend in housing starts decreased slightly in January, while the inventory of newly completed and unabsorbed units saw a modest downward trend in the last half of 2013,” said Mathieu Laberge, deputy chief economist at CMHC. “This is consistent with our expectation that builders will continue to gradually adjust activity in order to manage their levels of inventory.”
January marked the third consecutive month housing starts fell, raising concern demand is cooling after a long period of growth. Bank of Canada Governor Stephen Poloz foresees a “soft landing” for the housing market, which is expected to put even more pressure on exports to drive the next stage of recovery. With the Canadian dollar trending near four-year lows, exports could provide Canada a source of stability in 2014.
The Canadian economy is expected to grow 2.2 percent this year, according to the International Monetary Fund. A brighter business outlook, combined with a rebounding labour market and five consecutive months of GDP growth, has lowered expectations the BOC will cut interest rates over the next 12 months.
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