Canada: Housing Starts show a negative surprise – NFB

Data released today showed that Housing Starts in Canada dropped from 204.3K to 197.3K in December. Kyle Dahms, analyst at the National Bank of Canada affirms that starts did not contribute to construction during the fourth quarter. 

Key Quotes:

“Housing starts negatively surprised in December and in the process fell below the 200K level (which is elevated on a historical basis) for the first time in seven months. The slight deterioration in December stemmed from a 7.7K decline in the multi segment which reached its lowest level since March of this year and markedly down from the cyclical high reached in June (183.6K). The decline in the latter segment was consistent with building permits data showing a third consecutive decline in November for the number of multi permits emitted.”

“Builders may still be sitting on excess permits after having acquired a record number of them earlier in April of this year. That said, a strong labour market combined with demand for this more affordable segment of the market should keep multi starts steady going forward. On the flip side, single starts edged up slightly after registering a small decline in the prior month.”

“Looking at the quarterly perspective, housing starts posted a significant decline in Q4 after a marginal weakening in the third quarter of 2019.”