Housing starts hit speed bump

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Housing starts fell last month by nearly 15 per cent from October's 208,800 units, a decline felt across almost all segments of the construction market.

“Housing starts declined in November, reaching a level which is more consistent with the rate of household formation. The decrease in housing starts was due to a moderation in the multiples segment,” said Mathieu Laberge, deputy chief economist at CMHC’s Market Analysis Centre.

The seasonally adjusted annual rate of housing starts was 181,100 units in November, according to Canada Mortgage and Housing Corporation, down from October's performance.

In Canada's cities, the seasonally adjusted annual rate of urban starts decreased by 14.4 per cent to 158,900 units in November. Urban single starts increased by 3.5 per cent in November to 63,600 units, while multiple urban starts were down by 23.3 per cent to 95,300 units.

Ontario was particularly hard hit, with November’s rate of urban starts decreasing by 30.6 per cent. Western Canada fared better, with a fall of 13.4 per cent in the Prairies and 3.6 per cent in British Columbia. Urban starts increased 8.3 per cent in Atlantic Canada and 3.2 per cent in Québec.

The picture across rural Canada also reflected a slowing construction and housing sectors.

Rural starts were, in fact, estimated at a seasonally adjusted annual rate of 22,200 units in November.

The picture as a whole is gloomier than most analysts had expected given the harried pace of housing starts in the second and third quarters of 2011. They were driven growth in urban housing complexes, big and small.

Further growth in that segment has likely now been put on hold as developers wait to see how the national and global economies weather current crises.

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