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Canada: Housing starts are recording their first increase in four quarters - NBF

Data released today showed that housing starts in Canada rose for the second month in a row in November to 215K. National Bank of Canada analyst, Kyle Dahms, points out rose thanks in part to generalized growth in the singles segment. Noted that housing starts on track to rise during the fourth quarter for the first time in a year. 

Key Quotes:

“Housings starts rose to a five-month high in November. The improvement was mostly due to gains in the two westernmost provinces. Specifically, Alberta urban starts bounced back after having reached last month their lowest level since May of 2009.”

“The increase in single starts nationwide was a positive development – especially considering the per-unit contribution to GDP is greater than multis – and all ten provinces posted a positive print, a first in almost 10 year. That being said, the bounce came after having reached a post-recession low in October. In addition, affordability in this segment of the market has deteriorated in 12 of the last 13 quarters and should continue to be a headwind for starts going forward.”

“Looking at the quarterly perspective, after two months of data, housing starts are recording their first increase in four quarters in Q4. All in all, November’s report was positive, but it remains to be seen if the bounce in singles can persist in light of the current affordability backdrop.”

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