TD bank did a survey recently , the findings are as below....
* Housing starts increased from 194,100 units in May to 197,400 units in June, representing a 1.7% M/M increase. The June showing came in 12,400 above consensus expectations.
* The June showing came primarily from new urban, single-units (+11.1%, M/M). By contrast, construction in urban, multi-units faltered with a 3.1% M/M decrease. Rural starts also faltered by 500 units or 2.1% in June.
* On a regional basis, Ontario saw the biggest gain in new construction units; relative to May, new units shot up by 13,000. This was the largest month-over-month increase recorded since January of this year. According to the Canada Mortgage and Housing Corporation (CMHC), the outsized gain was recorded in both the single- and multi-dwelling categories.
* British Columbia posted the largest M/M decline in June. The province saw its monthly housing start tally decrease by 8,100 units (27.6%) in June to land at 21,200. However, its series so far this year has been quite volatile, so caution should be exercised in interpreting just one point in the data series.
* With June’s number now in, 2011 Q2 national housing starts averaged 191,000 units per month, well above our forecast of 178,000 units. Recent homebuilding activity suggests that builders are breaking ground sooner rather than later to beat out interest rate hikes on their way next year which will likely simmer down housing demand.
* Over the 2012-13 period, we are calling for a moderate correction in both resale activity and home prices across the country. With the resale home market gravitating more towards balanced territory, homebuilding should follow suit, albeit potentially with a bit of a lag.
* Looking ahead, housing starts should cool more towards demographic fundamentals and long-run household formation rates. We expect builders to start an average 164,000 units per month in 2012, before inching up to 171,000 units in 2013. These forecasts remain above decade-long averages, but are far lower than the record high starts seen during the boom times in 2006-07 or during the first phase of the recovery.
* Ontario and British Columbia were at opposite ends of the spectrum in June. Still, Toronto and Vancouver have seen a build up in new condo activity over the last two to three years. While concerns of overbuild are not yet pressing, these markets are in a more vulnerable position given current inventory levels, vacancy rates and overvaluation in the resale market. We expect a gradual correction in the number of new condo units going forward, but the level of new units in the pipeline should be monitored