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Data Release: Housing starts kick off the year on strong footing
- Canadian housing starts kicked off the year on a strong note, with homebuilders breaking ground on 207k units (annualized) in January. This extends December's sharp gain, and pushes the 6-month moving average up just shy of the 200k unit mark.
- The strength in January stemmed from the multi-family sector, which was up 4.2% following a 14% gain in December. Meanwhile, single family construction was down 4.6% on the month, reversing some of December's gains.
- Regionally, Ontario remained the key driver of growth, with starts up by a whopping 25% in January. Homebuilding in the Atlantic Provinces was also up during the month while the remaining regions recorded declines. B.C. experienced the largest pullback, as home starts slid 33% from the month prior.
Key Implications
- Overall, housing starts have been hovering around the 200k mark annualized (on a trend basis) for the last six quarters, or just slightly above the current rate of household formation. However, homebuilding construction should begin to slow over the course of the year, consistent with a cooling in overall housing market activity.
- Still, the recent strength in multi-unit projects could have further room to run given the surge in building permit approvals seen over the second half of last year. This could be partly offset by single-family construction, which is already at relatively lofty levels.
- The regional story will continue to reverberate across the housing markets, with central Canada leading the way, while B.C. and the oil-rich provinces lagging behind.
Bank of Canada announces overnight rate target
March 9 2016 Posted by Jennifer Gaudet
Bank of Canada announces overnight rate target
Compliments of http://www.mortgagebrokernews.ca/news/bank-of-canada-announces-overnight-rate-target-204212.aspx
The Central bank has released its latest rate decision.
The Bank of Canada said Wednesday it will maintain its target for the overnight rate at ½%.
“The global economy is progressing largely as the Bank anticipated in its January Monetary Policy Report. Financial market volatility, reflecting heightened concerns about economic momentum, appears to be abating,” the bank said in a release. “Although downside risks remain, the Bank still expects global growth to strengthen this year and next. Recent data indicate that the U.S. expansion remains broadly on track.
“At the same time, the low level of oil prices will continue to dampen growth in Canada and other energy-producing countries.”
The BoC also noted recent rebounds in oil and other commodities. Coupled with slight appreciation for the loonie, the central bank said economic conditions are evolving as assumed in its January policy report.
“Canada’s GDP growth in the fourth quarter was not as weak as expected, but the near-term outlook for the economy remains broadly the same as in January,” the bank said. “National employment has held up despite job losses in resource-intensive regions, and household spending continues to underpin domestic demand. Non-energy exports are gathering momentum, particularly in sectors that are sensitive to exchange rate movements.
“However, overall business investment remains very weak due to retrenchment in the resource sector.”
Overall, the bank said risks are balanced.
“The Bank’s Governing Council judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent,” the BoC said.
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