Canadian housing starts slow modestly in October

Mon Nov 10, 2014 9:57am EST
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By Leah Schnurr

OTTAWA (Reuters) - Canadian housing starts unexpectedly cooled in October as builders broke ground on fewer multiple-unit homes, including apartment buildings and condominiums, data showed on Monday.

The seasonally adjusted annualized rate of housing starts declined to 183,604 units last month from a revised 197,355 units in September, according to a report from the Canada Mortgage and Housing Corp, the country's national housing agency.

The latest result fell short of analysts' forecasts for 200,000. September was originally reported as 197,343.

The robust housing market that emerged in Canada following the global financial crisis has raised concerns that home prices could be due for a pullback, though policymakers have stressed recently that price gains are concentrated in the major cities of Toronto, Vancouver and Calgary.

Housing construction has been resilient this year, bouncing back from weather-related weakness in early 2014.

"While recent home prices trends are starting to raise some eyebrows, there's little concern about overbuilding in Canada, with housing starts trending near fundamental requirements," Robert Kavcic, senior economist at BMO Capital Markets, wrote in a note.

Groundbreaking on multiple dwellings dropped nearly 14 percent to 98,673 units, while construction on single detached homes edged up 5.6 percent to 66,010.

The drop in multi-unit dwellings also weighed on the overall six-month moving average for housing starts, which declined to 195,707 from 197,763.   Continued...

A construction worker uses a hammer as he works on the "ICE Condominiums" development site by Cadillac Fairview and Lanterra Developments in Toronto December 14, 2012. REUTERS/Mark Blinch