Canadian housing starts slipped 3% in November, but remained above expectations at 213,500 units.

BMO Nesbitt Burns said that the 12-month average moved to its highest reading since 1990, and total starts for 2002 will likely exceed the 200,000 level for the first time since 1989.

“On a provincial basis, Ontario was the biggest source of weakness, with starts falling by 9.1%, possibly due to early winter weather in the province. Most other provinces saw modest declines as well, with only New Brunswick and British Columbia managing to avoid the downdraft,” notes Nesbitt.

RBC Financial Group economists say that the numbers provide clear evidence that the Canadian economy is powering ahead with a substantial degree of momentum. “Recent strong residential permit issuance suggests singles should rebound in December. The good news here is that the fundamentals of the housing market remain solid. Strong demand has been met with rising supply, keeping house price gains at the national level fairly controlled, although pockets of more rapid price gains exist in some neighbourhoods around the country.”

“Low mortgage rates and robust employment creation this year have given the housing market a big helping hand, which in turn has been a source of support for the economy through the downturn,” concludes Nesbitt. The housing market still has some room to grow in the coming months before a Bank of Canada interest rate tightening cycle begins to work against it.”

http://www.cmhc.ca/en/News/nere/2002/2002-12-09-0815.cfm