Canadian housing starts fell by 9.6% in July, led mostly by a drop in construction of row houses and apartments.
The seasonally adjusted annual rate (SAAR) of housing starts dropped from 245,455 units in June to 222,013 units last month, Canada Mortgage and Housing Corporation (CMHC) reported on Friday. That still beat the median forecast of 202,000 units in a Bloomberg survey.
Multiple urban starts declined by 12% to 162,722, while single-detached urban starts fell by 4.6% to 46,400 units. Meanwhile, rural starts were estimated at a SAAR of 12,891 units.
Despite a decrease in the level of SAAR activity, the national trend in housing starts increased from 205,765 units in June to 208,970 units in July.
"High levels of activity in apartment and row starts in urban centres in recent months continued to be reflected in the high level of the total starts trend in July," said Bob Dugan, CMHC's chief economist.
July figures were “less of a reversal than we thought” after the surge in June, said Doug Porter, Bank of Montreal’s chief economist. The average of 208,000 so far this year represents elevated demographic demand, according to Bloomberg.
“Residential construction activity remains rock-solid in Canada and, combined with firming resale activity, will be something for the Bank of Canada to keep in mind,” Porter said.