The Vancouver Sun, Aug 11, 2015- New home construction slowed in July for the first time in three months, mostly as a result of fewer multi-unit projects started in urban areas — particularly Calgary, said the Canada Mortgage and Housing Corp. Tuesday.
Actual housing starts for Calgary were down 43 per cent in July from the same month last year, falling to 770 units from 1,354. For the year so far, housing starts are down 31 per cent for the city.
Calgary's economy has been hit by the protracted plunge in oil prices and it's showing in the real estate market, said Richard Cho, CMHC's principal of market analysis for Calgary.
"We're seeing slower growth in employment, fewer people migrating to the region as well," Cho said. "There's also some more uncertainty in the market and I think with that, perspective buyers are taking more time and being more cautious."
But Cho said it's important to keep in mind that Calgary saw record levels of home construction last year.
"It's not surprising to see the pace of activity to come down," he said.
For Canada as a whole, CMHC said last month's the seasonally adjusted annual rate was 193,032 units, down from 202,338 units in June.
The Ottawa-based federal agency had anticipated a slowdown but July's seasonally adjusted pace — which is a projection of what would happen over a full year, after accounting for typical variations related to the season — was below an estimate of 195,000 units from economists, according to Thomson Reuters.
The seasonally adjusted annual rate in Calgary plunged to 8,716 units in July from 19,146 the previous month due largely to a significant drop in apartment starts.
But Cho said month-to-month comparisons can be misleading, because all the units of an apartment are counted when construction begins on a building, meaning apartment starts come in waves.
Edmonton saw its seasonally adjusted annual rate jump to 19,922 units in July from 15,349 in June, while its six-month trend was down along with those in Calgary and Saskatoon.
Nationally, the six-month trend inched up, climbing to 185,586 units last month from 184,035 in June.
CMHC chief economist Bob Dugan said gains in multiple starts have offset declines in single starts over the last three months, largely due to more rental apartments, many of which are seniors' homes.
In British Columbia, the July seasonally adjusted annual rate for urban areas was 36,501 units, up from 34,870 in June. CMHC says B.C.'s new home construction has been keeping pace with demand, keeping supplies of unsold homes in check.
In Ontario, the rate fell to 49,047 units from 56,824 in June — although there was an increase in parts of the province outside of the Toronto area.
More information on the strength of Canada's real estate industry will come Friday, when the Canadian Real Estate Association publishes its July 2015 resale housing statistics.