Canadian housing starts jump, ease recession fears
By Jeffrey Hodgson
TORONTO (Reuters) - Canadian housing starts jumped a higher-than-expected 7.3 percent in September, helped by a surge in the condominium sector, suggesting Canada's property boom stayed intact last month and should help the economy avert recession.
Canada Mortgage and Housing Corp said on Tuesday that starts rose to a seasonally adjusted annualized rate of 205,900 units last month. August starts were revised up to 191,900 from 184,700.
The median forecast in a Reuters poll was for 188,000 starts in September.
"Canadian housing remains quite healthy. Tailwinds including low mortgage rates and a solid job market will continue to be offset by headwinds including shaky consumer confidence and high housing valuations, pointing to only a slightly softer pace of activity in the year ahead," Robert Kavcic, an economist with BMO Capital Markets, said in a note to clients.
Driving the gains was a jump in construction of multi-residential buildings such as condominiums. The government agency pointed to increased starts of so-called multiples in the Atlantic region, Quebec and British Columbia.
"Multiple housing starts are expected to move back toward levels consistent with demographic fundamentals in the near term," Mathieu Laberge, a deputy chief economist with CMHC said in a statement.
The agency said urban starts increased by 8 per cent to 185,900 units in September, with multiple urban starts up by 14.2 per cent to 118,000 units. Single family housing starts in urban areas decreased by 1.5 percent in September to 67,900 units.
Rural starts were estimated at 20,000 units. Continued...