CMHC says the annual pace of housing starts slowed in March to 204,251

OTTAWA – 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.

However, the drop was less than what had been expected by economists who were looking for an annual rate of 190,000 for the month, 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 six-month 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 in recent years, however the drop in oil prices since late 2014 has affected the regions in different ways.

TD Bank economist Warren Kirkland noted that B.C. and Ontario are likely to continue to enjoy strong gains in construction activity along with better economic conditions.

“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 as work in British Columbia, Quebec, Atlantic Canada and the Prairies slowed, but picked up in Ontario.

Multiple-unit urban starts dropped 9.7 per cent to 123,207, while single-detached starts slipped 1.1 per cent to 61,815.

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