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Analysts at National Bank Financial notes that Canadian housing starts were significantly up in June due to a large upward swing in the urban multiple category.

Key Quotes

“The breakdown reveals an expansion stemming from Ontario and Quebec, specifically with Toronto and Montreal seeing monthly jumps of 231% and 68% respectively in the multi category.”

“Although these results come after a slight faltering in the prior month the upswing was not too surprising due to demand being tilted towards the urban multiple category given sustained pressure for more affordable housing, especially in an environment of stricter mortgage requirements.”

“Looking at the quarterly picture, housing starts countrywide are on pace to contract an annualized 9.0% in Q2 and that on the back of an 8.0% decline in Q1. That may translate into a negative contribution to growth from residential construction in the second quarter of 2018.”