Leap in home building offers hope
by investor on 09/07/09 at 11:54 am
Construction of new homes has surged by a surprising eight per cent in June, prompting analysts to say the housing market in Canada has turned the corner and begun recovering.
The annual pace of housing starts rose to 140,700 units in June from 130,300 in May, with the increase in activity spread across different types of buildings, said the national housing agency, Canada Mortgage and Housing Corp.
“The increase in housing starts in June is broadly based, encompassing both the singles and multiples segments,” said Bob Dugan, chief economist at CHMC. “In addition, Western Canada experienced an increase this month.”
The leap in activity was much stronger than anticipated. Analysts had been expecting a small increase, after seeing decreases in nine of the previous 12 months.
While home construction is still 30 per cent less active than a year ago, there are many signs that the bottom has been reached and the housing market has moved on to a slow recovery, said Dawn Desjardins, assistant chief economist at Royal Bank of Canada.
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