The Canada Mortgage and Housing Corp. says while housing starts were up in August, they are expected to slow down in the fourth quarter. — Telegram file photo
St. John’s saw a bump in housing starts in August, according to data released Wednesday by the Canada Mortage and Housing Corporation.
There were 224 single-detached and multiple unit starts in August, compared with 193 in August a year ago. For the year to date, starts are up 13.2 per cent, to 1,431 units, over the 1,264 starts by this time last year.
The yearly increase is due completely to a boom in multiple units — with 607 starts this year compared with 429 to the same point in 2011, they’re up more than 41 per cent.
Chris Janes, the senior market analyst for Newfoundland and Labrador, said the surge in multiple starts is due primarily to the condo market as well as residential rental projects, but he expects things to slow down soon.
“Our recent forecast, which came out in the spring, is for about an 8.5 per cent decline, so we do expect things to slow down in the fourth quarter, in particular with the recent mortgage rule changes that will have a dampening effect on the market.
“We haven’t factored that into our spring forecast, obviously, but we’re factoring that into our fall forecast,” he said. “We think overall we’re going to see starts down in the single-digit area. I don’t think we’re going to have a negative year as we were expecting back in the spring, but I think we’ll probably be flat to five per cent on the upside.”
New mortgage rules were introduced in July that reduced the maximum amortization rate on new insured mortgages to 25 years from 30, as well as reducing the amount lenders could provide in home equity loans to 80 per cent from 85 per cent.