Nathan Janzen, the senior economist at the Royal Bank of Canada (RBC), notes that Canada’s total house starts increased to 246k from 197k in May, while permit issuance slowed 234k in May after April surge.

“Canadian homebuilding continues to chug along at elevated levels – still suggesting that significantly slower resale markets over the last year have had limited spillovers into homebuilding activity.  Part of the latest monthly jump may have had something to do with an earlier surge in permit issuance in B.C. in April.

And permits issued in May (released separately today) remained elevated at an annualized 234k despite BC more-than-retracing a huge 71k surge the prior month.

We still think that homebuilding will ultimately drift lower going forward given the earlier easing in resale markets.”