Canada posts 1.1% decline in September housing starts

Work on apartments, condominiums dropped, government reports

October 12, 2003|By BLOOMBERG NEWS

Canadian housing starts fell 1.1 percent last month, to a pace that would yield 234,600 in a year, led by a drop in work on apartments and condominiums, the government's housing agency said last week.

Ottawa-based Canada Mortgage & Housing Corp. also raised its August estimate to 237,200, making that month the second-best since 1990 and the September figure the third-best.

"Housing remains in good shape," Peter Buchanan, an economist at CIBC World Markets Inc. in Toronto, said in a note to clients.

Bank of Canada Governor David Dodge said last month that borrowing costs are low enough to boost consumer spending, which makes up 56 percent of Canada's $1 trillion gross domestic product. Interest rates have been cut twice since July. Record home sales powered the economy during the past two years before growth stalled and the economy shrank in the second quarter.

Work started on an annualized 104,500 apartments and condos last month, 2.4 percent fewer than in August. Single-family projects were little changed at 105,500. The figures are seasonally adjusted.

Total housing starts this year are 6.7 percent higher than in the corresponding period last year.

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