Housing starts were up in British Columbia and Vancouver in July, but down almost everywhere else in Canada, according to the latest numbers released August 11, 2015 by the Canada Mortgage and Housing Corporation (CMHC).
In B.C., starts for July (annualized and seasonally adjusted) were 36,501, an increase of 4.7% from the 34,870 starts in June. The increase was even more notable in Vancouver: 7.9% to 27,349 units in July from 25,360 units a month earlier.
“Strong demand for all types of homes translated into higher levels of housing starts in July,” Robyn Adamache, CMHC’s principal market analyst for Vancouver said in a release. “The trend measure of single-detached house construction edged higher while apartment and town home building registered more substantial increases. These trends point to robust demand for homes across the price spectrum.”
Housing starts are considered a leading indicator, with strong starts signaling optimism in the economy.
However, the rest of Canada did not fare as well as B.C.
Nationally, starts were 193,032 in July compared to 202,338 units in June, a drop of 4.6%. Ontario and Atlantic Canada both dropped 13.8%, the Prairies were down 4.9% and Quebec was down 3.2%.
The drops were more pronounced in major cities with starts in Calgary down 54%, Reginal starts falling 37% and Toronto starts down 23 %.
Yet despite the drops, the numbers still remain higher than the six- and 12-month averages, highlighting “how relatively unscathed the trend in housing starts have been from the oil shock, outside the most affected provinces,” Nick Exarhos of CIBC Wealth Management Economics wrote in a note.
Robert Kavcic, senior economist with BMO Capital Markets said in a note that while housing starts are consistent with demographic demand, they are inconsistent with past recessions.
“While there are regional weak spots and strong spots, there is hardly a hint of recession in the national housing market figures,” Kavcic wrote. “Overall Canadian construction activity continues to look very sturdy.”
Canada’s gross domestic product, the measure of economic growth, has declined for the first five months of 2015 . Negative growth for two quarters is often considered a recession.
