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Condo slowdown takes toll on Canadian housing starts

 By Greg Quinn, Bloomberg News

Published on May 8, 2013


National PostCanada Mortgage and Housing Corp. says the pace of housing starts slowed in April, mainly because of a decline in urban multiple starts

Canadian housing starts declined for the first time in three months in April led by multiple-unit projects, the federal housing agency said Wednesday.

Work began on about 174,900 homes at a seasonally adjusted annual pace in April, down 3.5% from March, Ottawa-based Canada Mortgage & Housing Corp. said. Economists forecast a reading of 175,000 according to the median of 25 responses to a Bloomberg News survey.

Wednesday’s figure is 31% below the year-ago pace. Finance Minister Jim Flaherty has said he welcomes the slowdown of condominium construction in Toronto and Vancouver after signs of overbuilding there, and has warned consumers with record debt loads relative to income not to become overextended.

“Homebuilding is tracking below the pace of underlying household formation, roughly 185,000, and is likely to do so for some time after overshooting in 2012,” Emanuella Enenajor, an economist at Canadian Imperial Bank of Commerce in Toronto, wrote in a note to clients. “We expect residential construction to exert a drag on overall growth this year.”

Multiple-unit housing starts in urban areas fell 3.5% in April to a pace of 93,500, a decline of 42% from the same month a year earlier, according to the CMHC report. Single-unit work fell 0.9% to 60,100 units, down 16% from the year-ago month.


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