December 2016 – Canada’s construction sector shows strong activity
Several reports show that last month the number of housing starts in Canada was significantly higher than predicted, and November building permits also exceeded forecasts. It means a real estate boom may be not finished yet.
According to the Canada Mortgage and Housing Corp. (CMHC), housing starts were up by 10.6% in December, outpacing the specialists’ forecasts. Moreover, the increase was reported both in the sector of detached houses and in the sector of apartments or condominiums.
Such gains led to a seasonally adjusted 207,041 units last month, following the revised 187,273 units of November. Earlier, economists surveyed by Reuters, predicted 195,000 units.
A recent report from Statistics Canada says the value of building permits was slightly lower in November because of weaker construction plans in Alberta, which followed a sharp increase in the previous month before the changes in building rules.
The 0.1% drop was not as strong as 5.0% expected by economists. October numbers were revised from 8.7% to 10.5%, and some other details from the report pointed to a stable position of homebuilders.
Surprisingly great real estate data, supported by strong jobs and exports, strengthened the forecasts of Canada’s economy finally getting better after several years of modest gains.
In the same time, home construction, sales and price growth may slow down this year, as we have stricter mortgage rules taking effect and last year’s tax for foreign homebuyers in Vancouver cooling the hot real estate market.
We’ve seen Canada taking measures on cooling the housing markets and reducing the household debt level during the previous years. And although most markets are reacting to it, Toronto still faces bidding wars and double-digit price growth.