Canadian housing starts fall in May on drop in multi-family segment, homebuilding pace likely to decelerate

Canadian housing starts fell 13 percent sequentially to 202.3k units in May. This follows a slightly downwardly revised 233.4k print in April. On a six month moving average basis, starts came in at 202.0k units, somewhat lower than in April, though still marking a sound pace.

The fall was mainly driven by the multi-family segment. After the prior month’s solid gain, multi-family starts dropped 18 percent to 146k units in May. In the meantime, single-detached starts rose 1.4 percent sequentially to 56.4k units.

Province wise, May’s fall was narrowly concentrated with starts lower in four of ten provinces. The largest fall was seen in Ontario, where urban starts fell 34.2k units to 49.7k. Urban starts were also slightly lower in Quebec and Nova Scotia while also falling in Alberta. On the contrary, urban starts came in higher in Manitoba and Saskatchewan. Urban starts also rose in B.C. and were 0.9k units higher in the Atlantic Provinces outside of Nova Scotia.

“Moving forward, we anticipate some slowing in the pace of homebuilding, as past declines in housing demand feed into construction. There is some downside risk in B.C's market, which has been supporting the national numbers so far in 2019. All told, homebuilding should remain relatively healthy at around 200k units going forward, lifted by robust population growth, solid labour markets, and the recent slide in borrowing costs”, said TD Economics in a research report.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bullish at 82.4272, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -55.8351. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex