Canada: Housing Starts rise in July, unlikely to remain at such an elevated level for long – NFB

Data released on Tuesday, in Canada showed Housing Starts rose beating expectations from 212K to 245K in July. According to Marc Pinsonneault, analyst at the National Bank of Canada, with July’s spike, housing starts have contributed strongly to new residential construction so far in the third quarter after having been a drag in the second quarter.

Key Quotes:

“Housing starts were stronger than expected for a fourth month in a row. The surge in construction in July was most notable in Ontario, New Brunswick, Nova Scotia and Alberta, although starts increased in eight provinces out of 10, the exceptions being Manitoba and Prince Edward Island.”

“We doubt that housing starts in Canada will remain at such an elevated level for long. One important source of demand for housing, namely immigration, has slowed markedly due to Covid-19.”

“We expect the unemployment rate to stay high in 2021. Young people have been relatively more affected by job losses due to the pandemic, and this could delay household formation.”