–Starts at SA Annual Rate Up From Feb 205,300, 199,900 In Jan
–Multiple Starts Up, Singles Down Marginally

By Courtney Tower

OTTAWA (MNI) – Canada increased a strong rate of new housing starts
in March, seasonally adjusted at an annual rate of 215,600 units, up
from 205,300 units in February and 199,900 in January, the Canada
Mortgage and Housing Corporation reported Wednesday.

Multiple-unit starts were the main reason for the increase, “while
single-detached starts decreased marginally country-wide,” Mathieu
Laberge, deputy chief economist the CMHC’s Market Analysis Centre, said.

In urban centers, communities of 10,000 persons and more, the
seasonally adjusted rate of starts in March increased by 4.1% to 192,100
units. Urban single starts moderated by 2.4% to 68,000 units. Multiple
urban starts, on the other hand, were up by 8l.3% to 124,100 units.

The big increase in urban starts occurred in the country’s largest
province, Ontario, up 30.3% from February, followed by a 6.4% increase
in the three Prairie Provinces, and by 2.7% in Atlantic Canada. The
urban start decreases were 27.7% in British Columbia on the Pacific
Coast and by 16.3% in Canada’s second largest province by population,
Quebec.

The urban starts increases were in multi-family units. These rose
by 50.4% in Ontario, but CMHC said “the pace is exceptional and not
expected to be sustained.”

The actual number of starts in Canada in March came in at 14,517
units, against 12,561 in March last year. Urban centers accounted for
13,761 actual starts in March and, of these, 9,731 were multi-family
starts.

Following 2011, when housing starts came in at 193,950 units,
Canada Mortgage and Housing Corporation has forecast starts at 190,000
for 2012 and 193,800 for 2013. However, because of “the heightened
degree of economic and financial uncertainty” in Canada and the world,
CMHC said, it has a changing scenario of possible starts for 2012
ranging between 164,000 and 212,700 starts. There would be between
168,900 and 219,300 units in 2013.

“After an active 2011, multiple starts are expected to moderate
while single starts will level off,” the federal agency said in an
earlier housing market outlook that said the national housing market in
2012 will “remain steady.” The agency sees single-detached starts stable
at 82,700 for 2012 (they had decreased in 2011 from 2010), and
multi-family starts moderating from two years of strong growth to a
level of about 107,300 starts in 2012 and about 107,500 units in 2013.

For sales of existing homes, the 2011 result was just over 456,000
units and CMHC expects resales of 457,300 units in 2012 and 468,200 for
2013.

Financial analysts generally agree, seeing better-than-expected
economic recovery in the United States and milder-than-expected
recession in Europe as supporting Canada’s economy, along with continued
low borrowing conditions. While several see the resale market as being
overvalued, excesses are generally expected to be unwound gradually as
interest rates rise. A fairly sharp correction could take place later,
after mid-2013, economist Sonya Gulati at TD Economics has written.

Contractors took out building permits in February worth C$2.3
billion (US$2.3 billion) for single-family dwellings in February, down
6.7% from January, the second consecutive monthly decline. Building
permits for multi-family homes fell 3.3% to $1.6 billion in February

Canada Mortgage and Housing Corporation guarantees about 980% of
housing insurance offered by private-sector companies.

** MNI – Ottawa **

[TOPICS: M$C$$$,MACDS$,MAUDS$]