Canada's May housing starts drop

The seasonally adjusted annual rate of housing starts dropped to 189,100 in May, down from 201,800 the month before, the Canada Mortgage and Housing Corporation said Tuesday.

The showing was worse than the modest decline to 196,000 that economists were expecting. But even the comparatively weak showing leaves housing starts 50 per cent higher compared to a year ago.

Both the singles (single-family homes) and the multiples segment (which includes condominiums) decreased, CMHC chief economist Bob Dugan said.

"The decrease in housing starts in May is consistent with our forecast that housing starts for 2010 will reach 182,000 units," he said.

In urban areas, the rate of starts declined 9.5 per cent to 165,200 units. Within that, the pace of decline was quicker among single-family homes, as multiple starts decreased by 5.6 per cent to 92,800 units, while single urban starts decreased by 14.1 per cent to 72,400 units.

Regionally, the rate of starts decreased 21.8 per cent in the Prairie region, by 13 per cent in Quebec, by 12.9 per cent in British Columbia and by 2.7 per cent in Ontario. Urban starts increased 23.3 per cent in Atlantic Canada.

"There are plenty of signs that Canada’s previously white-hot housing market is losing momentum," BMO economist Doug Porter said in a note to clients.