Edmonton housing starts plunge nearly 25% in June

Ken · 发表于 2011-8-15 15:44

A year-over-year plunge in home construction in June for the Edmonton region is being blamed on strong activity last year and rainy weather last month.

Following modest gains in May, housing starts in the Edmonton census metropolitan region totalled 719 homes in June, down 24.4 per cent from June 2010, according to Canada Mortgage and Housing Corp. figures released Monday.

Single-detached homes saw a greater downturn, falling 30 per cent from the same month last year to 443 starts in June. Multiple-unit starts were down 13 per cent from a year earlier at 276.

"We're competing against a fairly strong period last year, which really started to slow down in the second half," Richard Goatcher, CMHC's senior market analyst for Edmonton, said of the June decreases.

Compared with a moderate start this year, the first half of 2010 was the best performance for housing starts since 2007, he said.

In the first six months of 2011, total housing starts fell to 4,051, down from 5,379 in the same period last year. To the end of June, single-detached homes totalled 2,226 units, down 30 per cent from the first six months of 2010.

"Our view is that as we go through the year, the gap in the year-over-year comparisons will start to narrow because last year, we saw activity fairly strong in the latter part of '09 and the first part of 2010. Then the industry got into some inventory concerns and started to slow down."

Goatcher said a rainy June may also have deterred builders. "You have to assume a certain number of basements didn't get poured because they were full of water, so we might see a bit of a rebound this month."

Nationally, home construction rose more than expected in June, led by a jump in single-unit activity, the federal agency said Monday.

The seasonally adjusted annual rate of housing starts was 197,400 units last month, up 1.7 per cent from a revised 194,100 in May, CMHC said. The April figure was also revised to 194,100 units.

Economists had expected 184,000 to 185,000 starts in June.

"Housing starts increased in June due to an increase in single and multiple starts in Ontario," said CMHC chief economist Bob Dugan. "The revised numbers show that housing starts have been above their trend line since March. However, we expect housing starts to move back towards levels consistent with demographic fundamentals in the near term."

Emanuella Enenajor of CIBC World Markets said the data "suggest that house-building in Canada is still holding up and outperforming most expectations, as that sector is continuing to get a lift from stimulative low rates as well as positive sentiment from a robust resale market." Urban construction rose 2.2 per cent to 174,600 units in June, with single-unit starts up 11.1 per cent to 70,900, while multiple-unit starts fell 3.1 per cent to 103,700.

Urban housing starts jumped 24.1 per cent in Ontario and 5.6 per cent in the Atlantic region, but fell 27.6 per cent in British Columbia, 3.6 per cent in Quebec and 1.2 per cent in the Prairies.

"This should provide a boost to Q2 real GDP, offsetting some of the weakness resulting from Japan's supply-chain constraints. In addition, all of the gain in June was in single starts," Scotia Capital Economics said in a note.

"However, this strength is not expected to persist, as some of the gains are likely due to a shift in mortgage regulations in the early spring which brought forward future demand. In addition, record high prices, high levels of home ownership and relatively sluggish wage growth should limit demand going forward."

The seasonally adjusted annual rate of rural starts was 22,800 units, down from 23,300 units in May.

With files from Postmedia News bmah@edmontonjournal.com twitter.com/mahspace

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