All the best,
February 8, 2011
Data Release: Homebuilding Activity Remained Steady in January
* Housing starts totaled 170K in January, roughly in line with the 174K unit
market expectations. This level of activity is largely unchanged from the
final numbers posted for December (169K).
* Breaking it down by type of housing, single-detached starts were down M/M
by 1,300 units to reach 64K in January. Multiple unit activity was down
M/M by this same amount to land at 83K units in January, on par with
* A subdued pace of activity was particularly noted in urban regions. In
January, urban activity decreased M/M by 2,600 units or 1.7%. Rural
activity, on the other hand, increased M/M by 4K units or 20.5%.
* At a regional level, there was no provincial standout in terms of big
winners or losers or a particular housing type showing acute weakness.
Ontario (+4.5K) and the Atlantic region (+1K) posted small M/M increases. At
the other end of the spectrum, the Prairies (-5.5K) and BC (-2K) saw M/M
* January's housing start numbers confirm that homebuilding has indeed
downshifted into second gear. The subdued pace of activity in both the new
and resale markets is indicative of a soft landing where markets are
* Housing starts were 193K units in 2010, a level not seen since the market
heydays in 2008. Increasing household debt levels and mortgage rate
increases suggest that a return to the 2008 high water-mark is not in the
cards anytime soon. Rather, we anticipate activity to ease to 160K in 2011
and January's numbers are on track with our Q1 forecast. It will likely
take a few years before 2010 levels are once again revisited.
* Multiple unit activity has seen some significant swings in recent months.
This is in part because housing starts capture shovel-ready projects and
one condo site ready for construction can lead to a sizeable boost in the
month's tally. In spite of this volatility, we do expect multiple starts to
return to a more sustainable 75K annual average in 2011.
* In a separate Statistics Canada data release yesterday, the number of
residential building permits increased M/M by 3.7% in December. Although
this suggests that there is new activity in the pipeline, particularly for
multi-family units in Ontario, the lag between new permits and actual
housing starts can be long especially for large projects.
I hope this finds you Happy and Healthy!
All the Best!
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
FAX 905-828-2829 CELL 416-520-1577
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