Saskatoon housing starts slide in May

The Star Phoenix, June 9- Housing starts in the Saskatoon census metropolitan area slipped in May, continuing a downturn from 2014, the Canada Mortgage and Housing Corp. said in its monthly housing report.

There were a total of 253 starts in May compared to 272 starts during the same period in 2014. In the first five months of 2014 there were 573 single detached starts and 860 multiple starts for a total of 1,433 starts, about one-third lower than the same period in 2014.

"The trend in total housing starts declined in May for the six(th) consecutive month as home builders scaled back production of single-detached units," said Goodson Mwale, the CMHC's senior market analyst for Saskatchewan. "Both singledetached and multi-family starts have trended lower over the past several months as elevated inventory and weaker economic conditions have prompted a slower pace of construction so far this year."

Regina's residential construction slump was more pronounced in May, with 134 housing starts posted, less than half the 279 housing units started during the same period last year. Only 27 single-family homes were started in May, less than half the 56 homes started last year. Multiple-unit starts were also down more than half to 107 from 223 during May 2014.

For the year to date, there were 515 total housing starts, down one-third from 777 for the first five months of 2014.

Multiples accounted for 341 of the total starts, down from 496 in 2014, while single-detached starts numbered 174, compared with 281 during the same five-month period last year.

Across the country, the pace of new home starts picked up in May as the housing sector showed surprising strength Monday, giving economists hope for the second quarter after a slow start to the year. Housing starts hit a seasonally adjusted rate of 201,705 units in May, up from 183,329 in April. The increase was driven by multiple-unit projects in Ontario, the Atlantic region and Quebec.

Royal Bank economist Laura Cooper said the improvement in new home construction along with a stronger pace of sales in the resale market will contribute to an economic recovery in the second quarter. The economy took a hit in the first quarter as it shrunk at an annual rate of 0.6 per cent, due in part to the drop in oil prices. However, economists are looking for it to bounce back in the second quarter.

Breaking down the housing starts report, multi-unit starts in urban areas accounted for 122,367 of the total for May, up 16.9 per cent from April, while construction of single-detached houses in urban areas was steady at a seasonally adjusted rate of 58,868 units. There were an estimated 16,470 housing starts in rural areas.

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