Housing Starts in 2006 Reach Their Second Highest Level in Nearly Two Decades Despite Cooling in December
OTTAWA — New home starts are estimated at 227,400 in 2006, surpassing the level in 2005, reaching their second highest level in nearly two decades. However, the seasonally adjusted annual rate1 of housing starts decreased to 211,500 units in December from November's 229,300 units, according to Canada Mortgage and Housing Corporation (CMHC).
“Growth in 2006 housing starts was driven by low mortgage rates, solid employment and income growth, and a high level of consumer confidence. Even with the slowing trend in residential construction in recent months, new home starts estimated at 227,400 units in 2006 surpassed the level reached in 2005,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre.
“After two strong months in October and November, the volatile multiples segment fell in December and single-detached starts continued to trend downward, reaching their lowest level of the year. Housing starts are expected to remain strong in 2007, but are forecast to decrease to 210,900 units.”
December’s seasonally adjusted annual rate of urban starts declined 9.0 per cent from November to 180,000 units. Urban multiples fell 13.9 per cent to 93,400 units in December, while singles decreased 3.0 per cent to 86,600 units.
All regions saw urban starts fall in December compared to a month earlier. The largest declines were in the Prairie region and the Atlantic region where urban starts fell by 20.5 per cent and 17.9 per cent, respectively. Weaker activity in the urban multiples sector drove the decreases registered in both of these regions. British Columbia, Ontario and Quebec recorded smaller declines of 7.1 per cent, 3.6 per cent, and 1.5 per cent, respectively.
Rural starts in December were estimated at a seasonally adjusted annual rate of 31,500 units.
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