MNI:CMHC Canada Feb Home Starts 229,737 SAAR; Top Expectations

By Courtney Tower

     OTTAWA (MNI) - Canadian home building starts soared to 229,737 units  in

February, well above market expectations of 218,000 starts, seasonally adjusted

at an annual rate, Canada Mortgage and Housing Corporation said Thursday.

     Starts rose markedly from the January number of 215,260, revised downward

from 216,210 SAAR reported preliminarily last month.

     --STABLE TREND

     The six-month trend which the CMHC prefers as a guide to home starts was

225,276 units for February, a modest change from 224,572 units in January. The

national housing agency took this as meaning continuing stability in starts.

     The national trend for starts "has been very stable since November 2017,

masking offsetting trends for multi-unit and single-detached dwellings," Bob

Dugan, chief economist, said in the CMHC report. Multis have trended higher in

most major urban centers and single-detached starts lower, he said.

     --MONTHLY PICTURE MIXED

     The monthly picture, however, has been more of a mixed bag, according to

CMHC's statistics on SAAR starts by urban areas. In the two most important hot

spots for housing activity and prices over recent years, Greater Toronto and

Greater Vancouver, the numbers diverge.

     There was a 78% rise in starts in metropolitan Toronto in February to

71,031. In metropolitan Vancouver they declined 37% to 20,339.

     Yet on the six-month trend basis, CMHC said condominium and rental

multi-family units were setting the pace in construction activity "leading to a

strong start to the year in 2018."

     And for Toronto it said the trend rose in February "on the back of a record

number of apartment starts."

     Elsewhere, the month-over-month starts for former hotspot Calgary were down

15% while in the Alberta capital, Edmonton, they were up 5%. 

     Starts were up 120% in Montreal but down 77% in Quebec City. For the three

Prairie Provinces, they were up 6% in Manitoba, down 40% in Saskatchewan and -4%

in Alberta. In the four Atlantic Provinces, starts were up in two and down in

two.

     --BUILDING PERMITS UP

     Housing construction promises to continue to rise, with Statistics Canada

reportING Thursday that residential building permits rose 5.9% in January, led

by a 14.2% increase for multi-family dwellings.  

     Prospects for a slower Canadian housing  were outlined by Canada's largest

commercial bank this week, Royal Bank of Canada, saying that the new stress test

for getting mortgages with a 20% or higher down payment is clearly reducing home

resales.     

     RBC estimated in a March 6 commentary that February home resales in

February plunged nearly 35% year-on-year, seasonally adjusted, an eight-year

low.

--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com

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