(Adds regional data, analyst comment, context)
OTTAWA Oct 11 Canadian housing starts surged in
September compared with August, surpassing market expectations,
data from the national housing agency showed on Tuesday.
The seasonally adjusted annualized rate of housing starts
rose to 220,617 units in September from a 184,201 unit rate in
August, according to a report from the Canada Mortgage and
That was well above analysts' expectations for a slight rise
to 190,000 units.
The gains were broadly based, with construction of multiple
units - typically condos and rental apartments - up 22.3 percent
to 137,803 units, and single-detached urban home starts up 14.5
percent to 64,045 units.
Homebuilding rose in all regions except Ontario, where
multiples softened to levels the CMHC said were "more consistent
with household formation."
Canada's housing market has enjoyed a long expansion but the
start of a 15 percent tax on foreign buyers in Vancouver in
August has cooled that market, while the largest market,
Toronto, continues to boom.
The federal government last week unveiled yet another
measure to tighten mortgage lending and dampen foreign
investment in the market in a bid to lower the risk of a housing
bubble and fears of a U.S.-style market collapse.
Analysts said the building boom should cool soon.
"Permit figures had suggested a healthy outcome was in the
cards, but today's reading outstrips the pace in building
intentions by a wide margin, and we would expect to see somewhat
of a deceleration in the months ahead," Nick Exarhos, economist
at CIBC Capital Markets, said in a research note.
Surging housing starts in September will boost Canada's
economic growth in the third quarter, helping fuel a bounce back
in growth after oil production shutdowns in late spring caused
the economy to shrink in the second quarter.
(Reporting by Andrea Hopkins; Editing by Chizu Nomiyama and W