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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.”