UPDATE 1-Canada August housing starts weakest since April

Tue Sep 10, 2013 10:05am EDT
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By Solarina Ho

TORONTO, Sept 10 (Reuters) - Canadian housing starts fell more than expected in August to hit their lowest since April, hurt primarily by slower condo construction, according to data released on Tuesday that tempered property bubble fears.

The seasonally adjusted annualized rate of housing starts was 180,291 units in August, the Canada Mortgage and Housing Corp said.

This was well below market expectations of 189,500 starts and down from a revised July reading of 193,021 units. The government housing agency had originally reported 192,853 starts in July.

The August figure was the weakest housing start reading since April, when new homes were being built at an annualized rate of 175,922. The average so far this year stands at around 183,200.

"Although today's report and yesterday's permits data suggest housing is holding up fairly well, we expect higher mortgage costs, buyer fatigue and recent policy changes to contribute to a more appreciable slowing in the months ahead," Peter Buchanan, an economist with CIBC World Markets, said in a client note.

The report follows data out Monday which showed building permits hit record levels in July, mostly from robust strength in the commercial sector.

Canadian policymakers have been keeping a close eye on the country's housing market after record low interest rates helped fuel a post-recession property boom that some fear could be a bubble.   Continued...