Saturday, April 08, 2006

Starts Continue at Strong Pace in February

The seasonally adjusted annual rate(1) of housing starts was 240,900 units in February, down from 248,100 units in January, according to Canada Mortgage and Housing Corporation (CMHC).

"Despite the modest decline, the rate of housing starts in February continued to be very strong." said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "However, we expect activity to moderate over the course of 2006, as higher mortgage carrying costs due to rising house prices and modest mortgage rate increases contribute to a softening of demand for both existing and new housing."

The seasonally adjusted annual rate of urban starts fell 3.3 per cent to 208,300 units with decreases in both single and multiple starts. Multiple starts eased by 2.0 per cent to 101,400 units and single starts fell back 4.6 per cent to 106,900 units in February compared to January.

The vibrant economy in western Canada propelled starts higher in both British Columbia and the Prairies. Urban housing starts in the Prairies were up 11.5 per cent to 45,400 units while in British Columbia they surged 22.6 per cent to 39,100 units. In the rest of the country urban housing starts were down. The sharpest declines were in the Atlantic region and Ontario where urban starts fell 16.8 per cent to 10,900 units and 15.1 per cent to 73,700 units respectively. In Quebec, starts were down 8.8 per cent to 39,200 units.

Rural starts in February were estimated at a seasonally adjusted annual rate of 32,600 units.
For the first two months of the year, actual urban starts were 17.7 per cent higher than in the same period in 2005. Single starts increased 21.9 per cent and multiple starts rose 14.0 per cent compared to the same period last year.


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