Home construction rose 1.3% in April as Canada’s real estate market continued to show signs of recovery

Financial Post

Home construction rose 1.3% in April as Canada’s real estate market continued to show signs of recovery.

Canada Mortgage and Housing Corp. said Monday housing starts rose by a seasonally adjusted annual rate of 201,700 units last month, up from a revised 199,200 units in March. The March number was previously estimated at 197,300 units.

Economists had expected starts to increase by around 205,000 units in April.

“Higher multiple starts were nearly offset by a decline in single starts and rural area starts in April, said Bob Dugan, CMHC’s chief economist. “As a result, total housing starts edged higher in April.”

Urban starts increased by 5.1% to 182,500 units on a seasonally adjusted annual rate in April. Multiple-unit construction was up 27.2% to 98,600, while single units fell 12.7% to 83,900.

In British Columbia, urban construction rose 16.4% and the Prairie region posted a 6.7% gain. Ontario was up 4.5% and Quebec rose 1.1%, while Atlantic Canada declined 3.3%.

“This was only the second time that the pace of housing starts has breached the 200K-units barrier since November 2008,” said Millan Mulraine, senior strategist at TD Securities.

Rural housing starts totalled 19,200 units in April, down from 25,600 the previous month.

“On the whole, the report underscores the strong recovery in Canadian home building activity, and the Canadian housing market more generally, as favourable buying conditions continue to spur housing demand,” Mr. Mulraine said.

“However, in the coming months we expect the pace of activity to moderate as higher interest rates and home prices, and tighter mortgage rules temper demand.”

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