According to Jocelyn Paquet, analysts at National Bank of Canada, today’s data on Housing Start confirms the recovery in the housing market.
Key Quotes:
“Housing starts rose from 222.5K in July to 226.6K in August (seasonally adjusted and Annualized).”
“Statistics Canada also published July’s building permit data which showed the value of residential construction intentions rising 3.0% in August to C$5.1 billion.”
“Housing starts exceeded expectations in August, confirming what were already clear signs of stabilization in the Canadian housing market. Adding to the good news, the improvement stemmed from a decent gain in the single-detached category, which has a greater per-unit contribution to GDP than multis do.”
“Judging from permit data also released this morning, there might still be some upside for the segment. Over the past 6 months, an average 57.1K permits have been issued for single-detached dwellings while starts for the same category have averaged just 46.9K.”
“Looking at quarterly data, starts are now on pace for a marginal gain in Q3 after a massive progression in Q2 (+19.2%). At first glance, this could suggest that the contribution to third quarter GDP growth from residential construction will be subdued but a closer look at the sector breakdown looks more promising.”
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