Revised CMHC numbers reveal stronger May, June

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Canada Mortgage and Housing Corp have revised their June and May housing start figures, revealing a stronger market than expected – and evidence of a rebound from last year’s market slowdown brought on by tighter mortgage regulations.
 
Analysts had expected 187,000 housing starts for June, but the seasonally adjusted annualized rate came in higher at 199,586 units. Reinforcing this upward trend, CMHC revised its May starts higher to 204,616 from the 200,178 originally reported.
 
“As expected, the trend in total housing starts remained essentially stable in June, for a third consecutive month. This reflects general stability in regional trends over the same period,” says Mathieu Laberge, Deputy Chief Economist at CMHC. “As a result, the trend in national housing activity remains close to its historical average and is in-line with estimates of household formation. In June, gains in housing starts in British Columbia were offset by declines in other regions of the country.”
 
Good news for mortgage brokers, who have struggled to maintain numbers through higher volumes after Finance Minister Jim Flaherty reduced insured mortgages from 30 years to 25, and tightened up the requirements on lines of credit.
 
“Canada's housing market continued to defy the skeptics in June, not to mention Mother Nature and a bout of labour market unrest,” BMO Capital Markets economist Robert Kavcic reported in a note to clients. “With sales finding a floor in recent months, prices well behaved and homebuilding close to demographic demand, the soft landing story looks firmly in place.”
 
Tuesday’s data showed starts of single urban homes decreased by 4.1 percent to 62,743 units for June. Starts in the multiple urban starts segment, which includes Toronto once-booming condominium sector, decreased by 2 percent to 114,342 units.
 
Urban starts increased in British Columbia, but fell in all other regions, including Atlantic Canada, Ontario and Quebec.
 

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