Housing starts climb in November and reach a one year high - Thursday, December 10 2009
"The improvement in housing starts continued in November," CMHC chief economist Bob Dugan said in a statement. "Despite a small decline in November's multiple home construction, overall starts numbers were up due to a solid increase in singles starts." The November total is the highest to date this year - and substantially higher than the 118,500 mark reported this past April - but still below the expectations of many analysts in the financial sector.
In a note to clients, TD Financial Group economist Pascal Gauthier noted November's starts were "slightly below the consensus expectation of 160,000 units, and significantly below our more optimistic call of 165,000 units. "While we are somewhat disappointed with the headline figure, the composition of the increase in activity was favourable," he continued, adding, "It came from the single-detached home segment."
CMHC reported that the seasonally adjusted annual rate of urban starts increased by 0.7% to 141,100 units in November. Urban multiple starts decreased slightly from 72,500 units in October to 71,300 units in November. Single urban starts increased by 3.4% to 69,800 units in November. These upticks were not evenly distributed across the country. Urban starts gained 10% on a seasonally adjusted basis in Quebec, by 8.2% in the Prairies and by 6.2% in British Columbia. However, they fell 8.3% in Ontario and by 9.8% in Atlantic Canada. Meanwhile, rural starts were estimated at a seasonally adjusted annual rate of 17,400 units in November.
In a forecast published last month, CMHC said it believes housing starts will average 164,900 units in 2010 as average prices climb to $324,500 - compared to $312,950 this year. However, housing starts nationally are still well below those of previous years, where they consistently surpassed the 200,000 mark. Currently, starts aren't expected to reach 175,000 units annually for a few years yet and will keep pace with population growth. "The piping-hot Canadian housing market should continue to drive improved residential construction activity," Bank of Montreal economist Robert Kavcic said in his note to clients. "The Canadian construction industry is looking like a source of strength in the coming year."
Adding to the positive outlook was a report from Statistics Canada, which said building permits jumped 18% in October, their highest value in 13 months.
Housing Starts, Actual and SAAR*
Actual
SAAR
November
2008
November
2009
October
2009
November
2009
Final
Preliminary
Final
Preliminary
Canada, all areas
15,491
15,075
157,400
158,500
Canada, rural areas
1,991
1,568
17,400
17,400
Canada, urban centres**
13,500
13,507
140,000
141,100
Canada, singles, urban centres
5,782
6,671
67,500
69,800
Canada, multiples, urban centres
7,718
6,836
72,500
71,300
Atlantic region, urban centres
734
641
8,200
7,400
Quebec, urban centres
4,236
3,693
31,900
35,100
Ontario, urban centres
4,881
4,724
55,700
51,100
Prairie region, urban centres
2,179
2,966
28,000
30,300
British Columbia, urban centres
1,470
1,483
16,200
17,200
Source: CMHC
*Seasonally adjusted annual rates
**Urban centres with a population of 10,000 and over.
