Canadian housing starts seen easing through 2008
Last Updated: Wednesday, August 15, 2007

TORONTO, Aug 15 (Reuters) - Canadian housing starts will fall this year and through 2008 due to rising house prices and modest increases in mortgage rates, Canada Mortgage and Housing Corp. said on Wednesday.

The federal agency said new home construction will decrease in 2007 to 220,000 units, a 3.2 percent drop from the 227,395 recorded in 2006. It will decline further to to 207,200 units in 2008, CMHC said.

"Despite high employment levels, income gains and low mortgage rates, housing starts will trend downwards in 2007," Bob Dugan, chief economist at CMHC, said in a statement.

"The slight pullback in housing starts this year and next will be mainly due to the continued growth in house prices coupled with modest increases in mortgage rates."

CMHC said the level of new home construction will decrease in all provinces except Manitoba, Quebec, and Saskatchewan.

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