Canada May housing starts dip as British Columbia slows

Thu Jun 9, 2016 9:41am EDT
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(In this June 8 story, removes reference to two biggest cities in fifth paragraph.)

By Leah Schnurr

OTTAWA (Reuters) - Canadian housing starts dipped last month as groundbreaking slowed in British Columbia, data released on Wednesday showed, which could ease concern that the western province's property market is overheating.

Even with the small decline, national housing starts remained solid at a seasonally adjusted annualized rate of 188,570 units in May from 191,388 in April, the report from the Canadian Mortgage and Housing Corp said.

May's figure was slightly short of economists' expectations for 190,000 units.

The decline was led by fewer multiple starts in urban areas, including Toronto, CMHC's Chief Economist Bob Dugan said.

Groundbreaking also declined in Vancouver. The two cities have seen housing activity accelerate even as other areas have slowed due to an oil price shock, raising worries that Toronto and Vancouver could be in for a correction.

The slowdown in both cities in May were due to a decrease in construction of multiple units, which include condominiums, a particular source of concern for those worried about a housing price bubble.

Following recent calls for policymakers to do more to contain the housing market, Finance Minister Bill Morenau told an economic conference in Toronto on Wednesday that the government was "looking at all evidence" as it considers whether it needs to act again to tighten mortgage regulations.   Continued...

Realtors' signs are hung outside a newly sold property in a Vancouver, B.C., Canada neighbourhood. September 9, 2014. REUTERS/Julie Gordon/File Photo