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A glimmer of hope for Canada’s struggling home builders emerged Monday as the Canadian Mortgage and Housing Corp. announced an increase in the seasonally adjusted annual rate of housing starts.
Across Canada the rate rose 9.2 per cent in May, compared with April. In Quebec it was up 3.3 per cent.
Economists had expected the improvement, since April’s figures were bad. And they warned the marked remains weak compared with last year. But the uptick, they said, could be a sign that the industry is stabilizing or bottoming out.
“The broad-based nature of the increase in residential construction activity in May was an encouraging development for this beleaguered sector of the Canadian economy,” said Millan Mulrane of TD Securities. “Indeed, after plunging precipitously since late 2007, and appearing to be in free-fall in recent months, this rebound may be an indication that the sector is perhaps stabilizing.
“Nevertheless, with the Canadian labour market continuing to weaken and the overall economy remaining quite soft, we expect residential building activity to remain in the current depressed range for some time.”
In actual numbers, year-over-year, housing starts in Quebec were down 23 per cent in municipalities with 10,000 people or more. Single family homes took the hardest hit – down 31 per cent. Multiples were down 17 per cent.
“The May results do not surprise us, given the weak labour market and easing of the resale market since the fall of last year,” said Kevin Hughes, senior economist for Quebec at CMHC.
In the greater Montreal area, starts were down 29 per cent. Single detached homes slid 41 per cent, condominiums were down 24 per cent, while more affordable homes such as semi-detached and row houses were down nine per cent.
The Island of Montreal was one of the bright spots in the report, with total starts up 28 per cent. Astrid Joseph, market analyst for Montreal, said the increase was largely due to condominium construction and, to a lesser degree, rental units.
The South Shore slipped 10 per cent, while Vaudreuil-Soulanges dropped 44 per cent. The North Crown – which includes Laval, the North Shore and St. Jérôme – slumped 52 per cent.
By: By SHEILA McGOVERN, THE GAZETTE
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