However, the month’s annualized housing starts rate of 198,395 (down from 218,326 in June) performed above economists’ predictions of 195,000, reported Reuters.
Overall, Canada’s six-month trend of housing starts stood at 201,936 units in July.
“Housing prices might be a bubble in some Canadian cities, but July data show that starts and construction rest on a firmer foundation tied to population growth and demand,” CIBC Capital Markets chief economist Avery Shenfeld wrote in a research note.
BMO Capital Markets economist Robert Kavcic pointed at Vancouver’s condo market—which has seen an unprecedented number of construction projects—as the main factor driving B.C. housing starts.
Kavcic added that this momentum is expected to hold despite fears of a slowdown in home sales in the near future due to a newly implemented foreign buyer’s tax.
Canada’s lively real estate segment is among the few things keeping the economy afloat as the country experienced one of its slowest GDP growth rates on record, according to numbers released by Statistics Canada earlier this month.
Together, red-hot housing markets and vigorous bank lending now comprise approximately 20 percent of the economy—a proportion that last manifested back in the early 1960s.
New condo construction in Toronto boosts housing starts rate nationwide
Continuous growth accelerates construction in Vancouver, Toronto
In its latest report released on Tuesday (August 9), the Canada Mortgage and Housing Corp. stated that national housing starts declined by 13.3 per cent month-over-month in July.