Statistics Canada Releases Building Permits for May 2019
Following a record $9.5 billion in April, the value of permits issued by Canadian municipalities declined 13.0% to $8.2 billion in May. Increases in six provinces and all three territories were not enough to offset the decrease in British Columbia. The national decrease was largely the result of the value of permits for multi-family dwellings in British Columbia returning to recent levels, following a significant rise the previous month in response to Metro Vancouver’s impending increases in development costs introduced in May. 

Residential permits return to previous levels after surge in April
The value of residential permits was down 17.2% to $5.0 billion in May, following a 26.6% increase in April. Despite the overall decline in the multi-family dwelling component, seven provinces reported increases, with record highs in Prince Edward Island ($34 million) and New Brunswick ($30 million). Meanwhile, the value of single-family dwelling permits rose 1.8% to $2.3 billion, led by Ontario (+$47 million).

Decline in industrial permits offsets increase in institutional component
The value of non-residential permits declined 5.7% to $3.3 billion in May. The decrease followed the issuance of a high value industrial building permit in Ontario the previous month. The value of commercial permits edged down 0.9% to $1.9 billion. In the institutional component, the value of permits rose 25.7% to $815 million. Higher construction intentions for secondary and elementary schools in British Columbia, as well as for nursing homes in Quebec and Ontario, contributed to the increase.

Source Statistics Canada

CMHC Releases Latest Housing starts for June 2019
Canada Mortgage and Housing Corporation released the latest information for housing starts in June 2019 on Tuesday July 9th. CMHC said that the pace of housing starts rose to a seasonally adjusted annual rate of 245,657 units compared with 196,809 units in May. The result topped the 210,000 units that economists had expected, according to Thomson Reuters Eikon. Robert Kavcic, senior economist at BMO Capital Markets, said the result was yet another factor helping to drive a strong rebound in second quarter growth. “Residential construction activity remains rock solid, as still-strong demographic flows are supporting unit demand,” Kavcic wrote in a note. The increase in the pace of home starts came as the rate of urban starts increased by 26% in June to 234,238 units.

The annualized pace of multiple-unit projects such as condominiums, apartments and townhouses increased by 31%  to 185,804 units last month, while the pace of single-detached urban starts rose eight per cent to 48,434 units. Rural starts were estimated at a seasonally adjusted annual rate of 11,419 units. TD Bank economist Rishi Sondhi said new home construction in Canada has continued to hold up well, in contrast to the home resale market. “That said, starts are moving gradually lower on a trend basis, with the six-month average well off its near-term peak observed in late 2017,” Sondhi wrote. “We anticipate some further moderation, as starts move closer to a more fundamentally supported level of around 200,000.” The six-month moving average of the monthly seasonally adjusted annual rates was 205,838 units in June compared with 200,530 in May.

Source: CTV 

Home sales edge higher in June, with strong gains in Ontario, Quebec
Canadian Real Estate Association released home sales data for June 2019. The number of home sales in Canada edged up 0.3% in June from the previous year, as strong markets in Toronto and Montreal offset declines in B.C.. Sales were down 0.2% from the previous month. The MLS home price index rose 0.3%  from May, but was down 0.3% on an annual basis. The national average price for homes sold in June 2019 was just under $505,500, up 1.7% from the same month in 2018.  

Prices for the month were flat on Vancouver Island and in Calgary, Edmonton, Regina, Saskatoon and Moncton and fell in the Greater Vancouver Area, the Fraser Valley and Okanagan. There is excess supply in these markets, as well as in Newfoundland and Labrador.  However, there were price gains in Ontario markets, including Barrie, Hamilton, Niagara, Guelph, Ottawa and Toronto, as well as Montreal. The supply of houses continued to be tight, especially in the Greater Toronto area.

“There’s a growing divergence in Canadian housing market trends between eastern and western Canada,” said Gregory Klump, CREA’s chief economist.  “While sales activity in Canada’s three westernmost provinces appears to have stopped deteriorating, it will be some time before supply and demand there becomes better balanced and the outlook for home prices improves.”

Although the pace of home sales was near the 10-year average across Canada, activity remains well below levels recorded over much of 2015, 2016 and 2017, CREA said. 

This despite a tick downwards in mortgage rates.  “Moving forward, home sales will likely continue to trend higher in the second half, supported by a solid job market, strong population growth, low borrowing costs, further distance from past restrictive policies and supportive measures for first-time homebuyers,” says TD economist Rishi Sondhi.

Source: CBC