March housing starts beat projections

The pace of housing starts in Canada slowed in March due to a slowdown in multi-unit construction, Canada Mortgage and Housing Corp. said Friday.

The federal housing agency said the seasonally adjusted annual rate was 204,251 units in March, down from 219,077 in February.

But the drop was less than expected as economists were looking for an annual rate of 190,000, according to Thomson Reuters.

“The current building pace suggests that residential investment should continue being a growth contributor through the first half of the year, as started projects are seen through completion,” CIBC economist Nick Exarhos said.

CMHC said the sixmonth moving average of housing starts slipped to an annual rate of 196,783 units in March compared with 201,618 in February.

Low mortgage rates have helped the housing market across the country, however the drop in oil prices since late 2014 has affected regions in different ways.

TD Bank economist Warren Kirkland said B.C. and Ontario are likely to continue to enjoy strong gains.

“Construction activity is likely to be a drag on growth in provinces that are experiencing both a deterioration in economic conditions and a housing market downturn, including Alberta and Saskatchewan,” Kirkland said. “Everyone else will be somewhere in the middle, where low rates will help drive a modest uptick in housing demand, but a still elevated level of inventory of homes for sale may constrain construction activity.”

For March, the pace of urban starts fell 7.0 per cent to 185,022 units. Multipleunit urban starts dropped 9.7 per cent to 123,207, with single-detached starts slipping 1.1 per cent to 61,815.

Rural starts were estimated at a seasonally adjusted annual pace of 19,299.