Toronto, Ontario, July 11, 2006--New home construction in Canada picked up by 4.5 percent in June to beat analysts' expectations, though higher house prices and mortgage rates may moderate housing starts in the second half of the year, Canada Mortgage and Housing Corp. said on Tuesday.
Housing starts for June came in at a seasonally adjusted annualized rate of 232,200 units from a revised 222,200 units in May. Analysts had expected 221,500 starts in June.
Still, CMHC said activity should moderate in the second half of the year as rising prices and marginally higher mortgage rates ease demand for both existing and new homes.
Urban singles rose 1.1 percent to 92,400 units in June, while urban multiples, which include condominiums and apartments, grew 9 percent to an annual rate of 108,700.
Rural starts in June were estimated at an annual rate of 31,100 units, unchanged from the previous month.
"The pop did not discriminate--it was spread between singles and multis, across all regions of the country," Jennifer Lee, an economist at BMO Capital Markets, wrote in an an e-mailed note. "Not too shabby at this stage in the game."
But Lee pointed out that overall starts are below year-ago levels for a third straight month and that the three-month average shows activity has steadily slid from its March 2006 peak.
Urban housing starts rose in all five regions, with British Columbia leading the way with a 14.8 percent increase and the Prairie region up 6 percent. Ontario starts rose 2.8 percent, Quebec starts rose a smaller 0.3 percent, and the Atlantic region was up 12.3 percent.
