OTTAWA Jan 10 Canadian housing starts rose more
sharply than expected in December and November building permits
were also firmer than anticipated, separate reports showed on
Tuesday, suggesting Canada's long housing boom may not be over.
Housing starts surged 10.6 percent in the final month of the
year, well past already rosy expectations, as builders broke
ground on both single detached homes and multiple unit condos
and apartments in urban areas, the Canada Mortgage and Housing
The increase brought the pace of housing starts to a
seasonally adjusted annual rate of 207,041 units in December
from an upwardly revised 187,273 units in November. Economists
polled by Reuters had forecast starts to rise at a pace of
195,000 units and have been repeatedly surprised by the
resilience of the nation's building boom.
A separate report from Statistics Canada showed the value of
Canadian building permits edged down in November due to lower
construction intentions in Alberta following a surge the month
before, ahead of provincial building code changes.
The 0.1 percent decrease was not as large as the decline of
5.0 percent that economists had forecast. October was revised up
to a gain of 10.5 percent from the previously reported 8.7
percent. Details of the report also suggested some strength
remained for homebuilders.
"The increase in real residential building permits suggest
residential construction has room to run over the coming
months," Krishen Rangasamy, senior economist at National Bank
Financial, said in a research report.
"December's gains were not enough to prevent housing starts
from contracting slightly (in the fourth quarter) relative to
the prior quarter. But residential construction may not
necessarily subtract from Q4 GDP growth," he added.
The unexpectedly strong housing data built on the positive
surprise of strong jobs and export data reported last week, and
added to expectations that Canada's economy may be picking up
momentum after years of tepid growth.
Still, home construction, sales and even price gains are
expected to slow in 2017 as another round of tighter mortgage
rules take effect and the 2016 tax on foreign buyers in
Vancouver helps cool that once-boiling market.
Canadian policymakers have moved several times in recent
years in a bid to cool the housing market and prevent home
buyers from taking on too much debt. While most markets have
moderated, Toronto, the nation's largest, continues to see
bidding wars and double-digit price gains.
(Reporting by Andrea Hopkins; Editing by Jeffrey Benkoe)