New home construction slumps 8.9%
Across all types of housing and all provinces, the pace of construction for new homes is slowing across the country, according to data released today.
The Canada Mortgage and Housing Corporation said Thursday that construction started on 17,507 homes in October. That's more than seven per cent lower than where the figure was a year ago and in keeping with a general slowdown through the year.
Seasonally adjusted, that translates into a rate of 204,107 starts per year, down from an annual rate of 223,995 recorded in September. That's a decline of 8.9 per cent.
All provinces decline
"The monthly decrease in total housing starts posted in October was mostly due to a decrease in both single and multiple starts in urban centres in Quebec and the Prairies," CMHC economist Mathieu Laberge said.
The slowdown is especially pronounced in multiple-start buildings such as condominiums. Urban singles starts decreased by 7.6 per cent in October to 62,402 units, while multiple urban starts decreased by 11.4 per cent to 119,732 units, CMHC said.
Overall, declines were recorded in all regions, with Quebec reporting the biggest drop at 16.9 per cent.
"The bigger picture issue is how housing starts will react to the slow-down that some of Canada’s major urban centres are experiencing in terms of existing home sales," Scotiabank economists Derek Holt and Dov Ziegler said in a note following the release of the data.
Home sales were 16.7 lower in Vancouver in October compared to last year, and down 7.1 per cent in Toronto. With a construction slowdown underway in Canada's two largest housing markets, "how these changes will impact the decision making process of Canadian homebuilders is a key economic question through 2012 and into 2013," Holt and Ziegler noted.