Canadian Housing Starts: A negative surprise – NFB

Data released today , showed Housing Starts in Canada rose to 201.3K in November and Permits declined by 2.4K in October to 226.8K. According to Kyle Dahms, analyst at the National Bank of Canada argues it was a bad report but noted starts remained above the 200K level for the sixth consecutive month. 

Key Quotes:

“Housing starts negatively surprised in November but managed to remain above the 200K level (which is elevated on a historical basis) for a sixth consecutive month. Atypically cold weather across the country may have kept housing starts subdued in this latest report.”

“The slight improvement in November stemmed from 3.2K rise in the multi segment but that number followed a substantial decline of 21.1K in the prior month. Albeit small, the November increase in the multi segment was the largest since having reached a record high in June of this year.”

“Demand for affordable housing should continue to keep starts in this segment at elevated levels. Single starts for their part edged down after a slight increase in the prior month but remain well above the cyclical low reached this past February. While the gap between the number of permits and housing starts is the smallest in 18 months, there could still be a sizeable backlog in permits to be exerted. Looking at the quarterly perspective, after two months of data, starts are poised to decline 9.7% in Q4 after a marginal decline in the third quarter of 2019.”