For Bank of Montreal, the Bottom Line is that Canadian
homebuilding keeps on ticking, but there is not much here to overly
concern policymakers yet.
It notes Finance Minister Flaherty said yesterday that he does
not see bubble-like indicators in the Canadian housing market, but
added that we have to be careful that we don't get an artificial
increase in prices, a bubble, because of speculation. Note that
last spring, before the 4th round of mortgage rule tightening was
announced in June (and implemented in July), housing starts had
flared as high as high as 253k units and averaged just over 230k
units for all of 2012Q2.
Urban multi-unit starts inched up 0.9% in the month to 115k
units, while singles dipped 1.7% to 62.5k. Multi-unit activity
continues to bounce back from early-year lows (less than 80k in
January), while singles grind along at steady and historically tame
levels. Regionally, the bulk of the strength was in Ontario in
October. Specifically, multifamily starts in Toronto rebounded
after falling sharply in September. Through the first 9 months of
the year, starts in Toronto have averaged 33k units annualized.
Despite the skepticism, that is roughly in line, if not slightly
below, the rate of household formation, and down from 48k in 2012
and 40k in 2011. Elsewhere, Calgary and Edmonton also saw starts
pick up further, while activity in Vancouver, Saskatoon and
Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.