Canadian housing starts stronger than expected in March

Housing starts rose 5.0% in March 2012 to an annualized pace of 215,600. This result represents the fastest pace of new home construction since October 2008.

  • The increase reflected strong gains in urban multiples and rural starts, which were up by 8.3% and 11.9%, respectively. Urban single-unit starts fell by 2.4% in the month to provide some offset.
  • Gains were led by Ontario (30.3%), with the Prairies and Atlantic Canada also posting gains (6.4% and 2.7%, respectively).
  • New home construction in Canada was robust during the first quarter of 2012, with housing starts up an annualized 17.7% from the final quarter of last year and the quarterly pace of activity representing its highest level since the third quarter of 2008. At least part of the recent strength in starts likely reflected the effect of the warmer than usual winter temperatures that brought construction activity forward. Thus, we expect some modest payback in the coming months, with housing starts expected to moderate to an average of 188,000 for the remainder of 2012.

Housing starts surge

Canadian housing starts rose 5.0% in March 2012 to an annualized pace of 215,600 units from 205,300 in February (revised upward from the previously reported 201,100). The level of starts in March was the highest since October 2008 and was stronger than market expectations for a reading of 200,000. The higher level of housing starts in March reflected a large 8.3% jump in the urban multiples component to 124,100 annualized units, while rural starts surged 11.9% to 23,500 to reverse the previous month’s 11.4% drop. Urban single-unit housing starts provided a partial offset by falling 2.4% to 68,000 annualized units.

Urban starts surged by 30.3% in Ontario thereby reflecting a 50.4% jump in the multiples component (single starts fell 2.8%). The level of multiple-unit starts in Ontario was the second highest on record dating back to 1990. Gains were also seen in the Prairies (6.4%) and Atlantic Canada (2.7%) as strong increases in urban multiple-unit starts more than offset declines in the singles component. Urban starts fell 16.3% in Quebec partially reversing the previous month’s outsized 48.2% gain, while British Columbia’s urban centres saw activity fall to its lowest level since March of last year by being down 27.7% in the month.

New home construction in Canada was robust during the first quarter of 2012, with housing starts up an annualized 17.7% from the final quarter of last year and the quarterly pace of activity representing its highest level since the third quarter of 2008. At least part of the recent strength in starts likely reflects the effect of the warmer than usual winter temperatures that brought construction activity forward. Thus, we expect some modest payback in the coming months, with housing starts expected to moderate to an average of 188,000 for the remainder of 2012.

New home sales in Maple Ridge and Pitt Meadows

If you are looking to buy a new home, contact the Maple Ridge and Pitt Meadows Real Estate experts at the Cardas-Mugridge Real Estate Group. Realtors Kris Mugridge or Mark Cardas can help you get into the home of your dreams.

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