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Housing

August 2015 Housing Starts in Kitchener-Cambridge-Waterloo, Ontario and Canada

TORONTO - Housing starts in the Kitchener-Cambridge-Waterloo Census Metropolitan Area (CMA) were trending higher at 3,334 units in August compared to 2,928 units in July, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR) (1) of housing starts.

"Total housing starts trended higher due to more townhouse and apartment starts. Townhomes are an affordable alternative to the more expensive single-detached homes, but still have their own ground-oriented entrance. Growth in the population aged between 25 and 34 years old has increased demand from first-time buyers looking for their first home. Students, young households and seniors support demand for rental apartments, while first-time buyers and downsizing households support demand for condominium apartments. A tight resale market has meant more spill-over to the new home ownership market, boosting demand for single-detached homes and townhouses," said Erica McLerie, Senior Market Analyst at CMHC.

The SAAR of total housing starts was 3,677 units in August, up from 2,692 units in July. The increase in the SAAR was due to more townhouse starts. For the first eight months of 2015, actual starts have declined by 6.5 per cent from the same time last year due to fewer apartment starts.

Housing starts in the Ontario region were trending at 67,113 units in August, up from 58,700 units in July, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR)(1) of housing starts.

"The Ontario residential construction trend in August reached its highest level since 2012. A broad based increase was registered for a second consecutive month as both low density and high density starts registered gains. While the pace of construction should ease in the coming months from elevated August levels, an improving job market, less choice in the resale market and strong rental demand will continue to support starts activity across the province," said Ted Tsiakopoulos, CMHC's Ontario Regional Economist.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next.

The SAAR of total urban housing starts jumped to 92,422 units in August, up from lower than normal activity in July. Roughly half of Ontario urban centres posted increases in the latest month with the GTA leading the way. Ontario urban housing starts for the period ending August are running 13 per cent above levels for the same period one year ago.

The trend measure of housing starts in Canada was 196,565 units in August compared to 185,642 in July, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"Housing starts have been trending up, supported by strong condominium activity in Toronto. This is in line with CMHC's most recent forecasts that would see demand shift from new higher-priced single-detached homes towards lower-priced alternatives," said Bob Dugan, CMHC's Chief Economist. "While national starts have increased, housing construction has started to slow in Alberta and Saskatchewan as a result of weakening economic conditions related to the decline of oil prices."

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of Canada's housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR was 216,924 units in August, up from 193,253 units in July. The SAAR of urban starts increased by 13.6 per cent in August to 201,312 units. Multi-unit urban starts increased by 19.5 per cent to 142,927 units in August and the single-detached urban starts segment increased by 1.4 per cent to 58,385 units.

In August, the seasonally adjusted annual rate of urban starts increased in Ontario, but decreased in British Columbia, the Prairies, Atlantic Canada and Quebec.

Rural starts were estimated at a seasonally adjusted annual rate of 15,612 units.

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