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Region's housing starts surge over '09 period


Blog by The Schacter Team | March 9th, 2010


But HST, new mortgage rules credited

 
 

Home building moved into a higher gear in Metro Vancouver last month as the number of houses started surged to 1,402 units, twice the number posted a year earlier, Canada Mortgage and Housing Corp. said Monday. Starts in the first two months of the year were 77-per-cent higher than in the same period last year.

But the federal housing agency cautioned against getting too excited by February's homebuilding exuberance.

"The first few months of 2009 saw some of the lowest levels of homebuilding on record, so year-over-year comparisons are large," CMHC said.

"Home starts this year are forecast to be higher than 2009 but below the five-year average."

A few large multi-unit residential projects in Vancouver provided the biggest boost to February's starts, CMHC said.

Nationally, home building rose by a more-than-expected 6.1 per cent to 196,700 units in February, CMHC said.

That was up from 185,400 units in January and above economists' forecasts of 190,000 units for February.

"The gain in February housing starts was concentrated in the multiple starts segment, particularly in Toronto," said CMHC's chief economist Bob Dugan.

Urban housing starts were up nine per cent from January to 179,100 units on a seasonally adjusted basis, with multiple units rising 19.1 per cent to 89,900 and single starts increasing 0.5 per cent to 89,200 units.

Ontario recorded a 28.6-per-cent gain in February, while Atlantic Canada rose 14.3 per cent, the Prairie region increased 10.8 per cent and B.C. was up eight per cent.

Quebec saw housing starts fall 14.1 per cent. Housing starts in rural areas totalled 17,600

units in February, down from 21,100 the previous month.

Ian Pollick, economics strategist at TD Securities, said February's gain shows "the new-homes market is slowly coming back to life and may finally be benefiting from the resurgence in overall housing market activity."

"However, we caution that the pace of advance will likely be hard-pressed to eke out similar gains later in the year, mainly as a result of enthusiastic buyers attempting to close transactions ahead of the regulatory [new mortgage rules] and [harmonized sales] tax changes coming into effect mid-2010," he said.

"As such, this report likely overstates the true strength of the recovery in new residential housing, though it is safe to say that housing still remains a bright spot in Canadian economic activity."