Tag Archives: Canadian housing starts
By Ka Yan Ng – Reuters
Canadian housing starts inched up 1.3% in April, offering further evidence that recovery in the housing sector is a major component of Canada’s economic recovery.
New home construction rose to a seasonally adjusted annualized rate of 201,700 units in the month from a revised 199,200 in March, Canada Mortgage and Housing Corp figures showed on Monday.
The April number, however, came in below the average forecast of analysts, who had called for 205,000 starts. The March number was revised up from an originally reported 197,300 units.
“This was only the second time that the pace of housing starts has breached the 200 K-units barrier since November 2008,” Millan Mulraine, a senior strategist at TD Securities, said in a note.
The Canadian dollar pulled back slightly after the data was released, but at C$1.0236 to the U.S. dollar, or 97.69 U.S. cents, it was still about 2% higher than Friday’s close, surging on the back of a European rescue deal.
The seasonally adjusted annual rate of urban starts rose 5.1% to 182,500 units as a big jump in the volatile multidwelling group offset a retreat in single-family homes.
The multidwelling group, which includes high-rise condos, climbed 27.2% to 98,600 units. Starts in the closely watched single-family component dropped 12.7% to 83,900, breaking an 11-month streak of gains.
Market players continue to forecast that home sales will slow in the second half of the year after a spring burst of activity due to higher interest rates, new mortgage rules and the introduction of harmonized sales tax (HST) regimes in Ontario and British Columbia.
“While we are looking for further improvement in home construction across Canada through the spring months, we are more uncertain about the late summer, early fall as demand starts to retrench in the new home market in reaction to the introduction of the HST and higher borrowing costs,” Scotia Capital economists Derek Holt and Karen Cordes Woods said in a commentary.
Housing starts went up in most parts of the country in April, led by British Columbia, up 16.4%. Starts were up 6.7% in the Prairie region, 4.5% in Ontario, and 1.1% in Quebec. Urban starts fell 3.3% in the Atlantic provinces.
Rural starts in April were estimated at an annual rate of 19,200.
Tavia Grant – Globe and Mail
Canadian housing starts cooled for the first time this year in March as condominium construction eased.
Housing starts fell 1.5% last month to 197,300 units on a seasonally adjusted annual basis as builders broke ground on fewer multiple-unit dwellings, Canada Mortgage and Housing Corp. said.
National starts have been generally rising in recent months as Canada’s real estate market steams ahead. While last month’s reading was little changed, several factors suggest the market remains strong: February’s revised numbers show starts climbed above the 200,000 mark for the first time since October, 2008. And single home construction hit a four-year high in March.
Multi-unit construction, meantime, tends to be volatile, with the March drop following a month-earlier increase.
The pace of housing starts – and broader real estate activity – will likely ease in the second half of this year as mortgage rates rise and new tax regimes and regulations dampen the market, economists said.
“It’s a bit hard to believe starts will hold at this level,” said Pascal Gauthier, economist at Toronto-Dominion Bank.
Canada requires a pace of housing starts of about 175,000 to 185,000 to keep up with demographic demand, economists estimate.
In March, urban multiple starts fell 15.2% while single-family starts grew 6.9%.
The findings echo a report last week, showing building permits eased due to a lull in multiple-unit activity. Building permits fell for the second month in a row in February, sliding 0.5% in the month.
Single starts are now running at a four-year high. “Activity in this sector is now up 126% from the recession low and … has seen 11 consecutive monthly gains since bottoming in April last year,” Bank of Montreal economist Robert Kavcic said.
Starts fell 16.3% in British Columbia, 15.5% in Ontario, and 8% in Atlantic Canada. They rose 13.5% in Quebec and 7.3% in the Prairies.
Rural starts were estimated at 22,100 units in March.
Levels in January and February were revised upward. In January, they rose 7.5% to 189,000, and in February, the new reading shows they rose 6% to 200,400 units.