Housing Starts

THE LIE
"We’re also helping Canadians invest in new homes, through the First-Time Home Buyers Tax Credit and the new Home Buyers’ Plan. And it’s working, friends; housing starts were up by more than 10,000 last month."
from a speech on the Economic Action Plan, June 11, 2009

THE TRUTH
It sounds as though 10,000 more homes were built in May than April, or than last May. What the CMHC actually reported was that the Seasonally Adjusted Annual Rate of housing starts increased by 10,800. What's the SAAR, you ask? "All starts figures in this release, other than actual starts, are seasonally adjusted annual rates (SAAR) – that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels." In other words, if you were to take the improvement seen in May, and extrapolate that over an entire year, there would be an increase of 10,800. That represents an estimated increase of 900 housing starts in May.

I should also note that the starts are not distributed evenly throughout Canada. Ontario enjoyed the sharpest improvement in urban starts of 22% (11-figure cash infusions into auto industry and infrastructure), while BC suffered a decline in the SAAR of 5% (zero bridging support for industries like forestry and lumber, mining). Moreover, housing start levels are still well below that estimated by demographic demand, about 27% below it.

CMHC in da house

Harper gets the neighbours (Bush II and Calderon) to help pretty things up a little.