HOUSING STARTS FALL LESS THAN EXPECTED

Canadian housing starts slid less than expected in June but are likely to keep falling in the second half of the year, Canada Mortgage and Housing Corporation says.

Housing starts dropped 4.2 per cent to a seasonally adjusted annualized rate of 225,500 units in June from an upwardly revised 235,200 units in May. Analysts polled by Reuters News Agency had expected 216,500 starts in June.

After a significant rise in May, the volatile multiple segment lost most of the ground it gained in June, CMHC chief economist Bob Dugan said. "Although housing starts will remain high in 2007, they are expected to resume a gradual decreasing trend."

Urban multiple housing units, which include condominiums and apartment buildings, fell 10.4 per cent to 100,400 units from 112,000 in May, while urban single-family dwellings rose 2.1 per cent to 92,200 units from 90,300.

"Over all, the Canadian housing sector remains healthy, though some moderation during the second half of the year should be expected," TD Securities Inc., economist Millan Mulraine wrote in a research note.

In a note to clients, Royal Bank of Canada economist Rishi Sondhi predicted higher interest rates will slow housing activity. "Our forecast calls for starts to moderate but remain above 200,000 in 2007, then slow to 190,000 in 2008." Source: CREB, posted by www.JoeSamson.com

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