Housing market rebounds, Ontario leads way

Tue Sep 9, 2008 1:01pm EDT
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By Frank Pingue

TORONTO (Reuters) - Housing starts rebounded in August, beating expectations, but some economists cautioned against reading too much into the number since it followed a weak reading in July.

Housing starts rose 13 percent in August to a seasonally adjusted annualized rate of 211,000 units from 186,500 units in July, Canada Mortgage and Housing Corp said on Tuesday.

The bulk of the overall gain, which topped the consensus analysts' expectation for 195,000 starts, was in Ontario, where there was an 81 percent jump.

Government-owned CMHC attributed the surge to multiple-unit starts, which shot up 25.2 percent to 114,700 units following a 20.2 percent slide in July.

Starts on urban single-family residences rose 2 percent to an annual rate of 71,200 units, while rural starts in August were estimated at an annual rate of 25,100 units, unchanged from July.

"After a brief pause in July, the volatile multiple segment bounced back to a level of activity that is more consistent with our forecast for this year," Bob Dugan, chief economist at CMHC, said in a statement.

The data contrasts with the state of the housing market in the United States, which has been hit by a crisis that began in the subprime mortgage sector and spread across other sectors of the market and the broader economy.

But some experts were quick to suggest that since the bounce back in housing starts followed weakness, it does not mean that housing activity in Canada is buoyant.   Continued...