Canada: New home starts may subtract from Q3 GDP - NBF

According to data released today, housing starts decline in Canada in July. National Bank of Canada’s analyst, Jocelyn Paquet, point out that the retreat was expected and mentioned that housing starts countrywide are on track to contract an annualized 21.8% in Q3.

Key Quotes:

“Housing starts declined in July to an annualized 206.3K from 246.2K in June (...) Urban starts fell 36.6K (to 190.1K) with declines in both the singles (-2.0K to 53.9K) and multis (-34.6K to 136.2K) categories.”

“Housing starts weakened in July but that could be expected following the unsustainable pace set in June. The decline was in large part caused by a sizeable drop in groundbreakings for urban multiples. Then again, that wasn’t such a big surprise as that category had climbed to an all-time high of 170.8K in the previous month.”

“The moderation observed in the pace of starts in the country in July is in line with the latest data on building permits. Indeed, a report released yesterday by Statistics Canada showed permits in the residential sector slid 10.8% in June. The latter are now down 5.1% on their level twelve months ago.”

“Looking at the quarterly picture, housing starts countrywide are on track to contract an annualized 21.8% in Q3 and that on the back of two consecutive declines in Q1 and Q2.”