The growth in total housing starts has been driven by the condo market, which is up 36%: CMHC

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Mario ToneguzziHousing starts in the Calgary census metropolitan area fell by nearly 23 per cent in June compared with a year ago.

According to a report released Tuesday by Canada Mortgage and Housing Corp., there were 1,067 units started in June.

The federal agency said the single-detached market saw a decline of 19 per cent to 360 units while the all other category dropped by 25 per cent to 707.

“June housing starts were down in Calgary year-over-year, but year-to-date . . . there has been eight per cent growth over 2017,” said CMHC. “Single-detached units were on par with the previous year, while there were roughly half as many rental units initiated. The growth in total housing starts has been driven by the condo market. Condo starts grew 36 per cent YTD over 2017.”

In Alberta, total housing starts of 2,208 were down 15 per cent. The single-detached market in the province fell by 19 per cent to 1,032 units while all other housing categories dropped by 12 per cent to 1,176 units.

At the national level, CMHC said the trend in housing starts was 222,041 units in June 2018 compared to 216,701 units in May. This trend measure is a six-month moving average of the monthly seasonally-adjusted annual rates.

“The national trend in housing starts increased in June, reflecting a jump in the SAAR of multi-unit dwellings in urban centres in June to a historical high,” said Bob Dugan, CMHC’s chief economist. “Notably, the national inventory of newly completed and unabsorbed multi-unit dwellings has remained below its 10-year historical average so far in 2018, indicating that demand for this type of unit has absorbed increased supply.”

Omar Abdelrahman, economist with TD Economics, said the CMHC report was a surprise on the upside.

“While this rebound is not surprising, its magnitude is more pronounced than expected, resulting in a slightly higher than expected Q2 performance,” he said. “Nevertheless, it is important to note that the increases were concentrated in one segment, and were mostly within the Ontario region. The higher-than expected growth, accompanied by the recently-released permits data showing declines in issuances, should result in a pull-back during the remaining half of the year, with starts expected to remain modestly below the 200k mark.”

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.


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