Canada’s federal housing agency said Monday the annual pace of new housing construction slowed materially in February, with far fewer multiple-unit projects such as condos and apartments breaking ground.
The Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of home starts decreased to 156,276 units last month, down from 187,025 in January — and below estimates held by experts for 179,000 units.
“Any way you slice it, today’s housing starts release was among the weakest prints we have seen in some time. While in part weather-induced, thanks to the harsh February weather in much of Canada, the trend is clearly toward weakness in the housing market,” TD Bank economist Randall Bartlett said.
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Housing experts at Royal Bank of Canada said the pace of construction last month hit lows not seen since the last recession.
“Homebuilders significantly curtailed residential construction activity in February, breaking ground on the lowest number of housing starts since July 2009,” Laura Cooper, an economist at the Royal Bank of Canada, said.
Cooper said she expects improving weather this spring will help “retrace some of this outsized plunge in the coming months.” But with Alberta and other Prairie markets now slowing as lower oil prices take hold, housing construction is expected to remain “tempered,” she said.
As the country’s property market has boomed over the past decade, residential construction has grown into a major source of employment — but is now a sector that could be in for job losses as the market cools, experts say.
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Condo drop
The agency says the rate of new home starts in urban areas fell to 140,722 in February, down from 171,950 in January. The decrease was led by a slower rate of multiple-unit dwelling, which fell to 86,214 units in February from 115,123 in January. Multi-unit dwellings is the term the CMHC uses for apartments and condominiums.
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CMHC says single-detached urban starts decreased to 54,508 units in February from 56,827 the previous month.
The six-month moving average in February was 182,137 units, compared to 188,761 in January.
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