TORONTO (Reuters) – Canadian housing starts slowed as expected in May after a red-hot April, retreating to the average of the last six months, Canada Mortgage and Housing Corp said on Friday.
The seasonally adjusted annualized rate of housing starts was 211,400 units, compared with 243,800 units in April. The April figure was revised down from 244,900 units reported previously.
The number of starts in May was just below the forecasts of analysts in a Reuters poll, who had expected 212,000 starts.
“As anticipated, the pace of housing starts observed in April was not sustained in May. In fact, the pace in May was more in line with the average over the last six months,” said Mathieu Laberge, deputy chief economist at CMHC.
“Although some ups and downs are likely to continue in the months ahead, the pace of housing starts should trend lower as the year progresses,” Laberge said in a statement.
The slowdown was led by a decline in multiple family urban starts, which fell 20.7 percent to 125,300 units, while urban single starts decreased 4.2 percent to 64,300 units.
The seasonally adjusted annual rate of urban starts decreased by 15.8 percent to 189,600 units in May.
Canada’s hot housing market has sparked fears of a bubble, particularly in Toronto, Canada’s largest city, where low interest rates have driven a condominium building boom and double-digit annual price increases in existing home sales.
May’s seasonally adjusted annual rate of urban starts decreased by 35.8 percent in Québec, by 18.3 percent in Ontario, and by 7.7 percent in the Prairies. Urban starts increased by 6.4 percent in Atlantic Canada and by 20.9 percent in British Columbia. In each region, the decrease or increase was mainly due to changes in multiple starts.
(Reporting By Andrea Hopkins; Editing by Chizu Nomiyama)