Housing starts slow as Prairies cool off

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Housing starts slow as Prairies cool off

4 x3 y5 ^% A, H) ~8 STAVIA GRANT
" p/ z- _- b, {$ dGlobe and Mail Update

2 o% |# `% ~  S* j3 u6 DHousing starts pulled back in December — even in the West — suggesting 2007 won't likely keep up with last year's pace, which saw home starts hitting their second-highest level in almost two decades.
) D2 y1 I7 N# i4 PIn December, the seasonally-adjusted annual rate of housing starts fell to 211,500 units from November's 229,300 units, according to Canada Mortgage and Housing Corp.
8 _  a! p. v  q. }( S3 W; O+ h, M3 cCMHC has long predicted that last year's blistering pace of starts won't be matched this year. Economists echoed that view today.
“This reinforces the view that the housing market in Alberta is finally coming off the boil,” Jacqui Douglas, economics strategist at TD Securities, said in a note.
2 P* G. z. X1 S1 _0 l+ g( |4 s“The level of housing starts going forward could be affected by Mother Nature, and whether she finally decides to wave her winter wand. However, it appears as if Canada's housing market may be cooling after several years of robust growth, and starting to move towards more sustainable levels.”
2 e, J0 {; X* P- y' j8 HUrban starts fell 9 per cent in December from November as multiples fell 13.9 per cent and singles decreased 3 per cent to their lowest level in more than five years, according to analysts.
All regions saw urban starts fall in December compared to a month earlier. The biggest drops were in the Prairies and the Atlantic region.
Even though starts were lower in December, it still marked the 43rd month in a row that they surpassed 200,000 units, the longest sequence on record, according to National Bank Financial.
9 z- I7 R2 q9 n) p1 ]; f* C* MStarts rose to about 227,400 last year, surpassing 2005's level, amid low mortgage rates, solid employment and income growth and a high level of consumer confidence, CMHC said.
Alberta led the nation last year, with a 20 per cent increase from 2005. Starts hit a record in the province last week, though they're also expected to ease this year because of higher house prices.
& j# `9 y/ c0 i9 n; s. [9 T# OCanada's national housing agency expects that the national level will ease to 210,900 units this year as higher mortgage costs and slower economic activity dampen residential demand.
: O0 F" {+ w; @( ~4 d1 IEconomists agreed.
  B: v  `! P$ F# ]“Looking ahead to 2007 we continue to expect the lagged effects of previous Bank of Canada rate hikes to weigh down on residential home construction,” said Eric Dubé, an economist at National Bank Financial.