Ottawa housing starts trend down in February: CMHC

OBJ Staff
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Housing starts in Ottawa trended down across the board in February, the Canada Mortgage and Housing Corporation said Tuesday.

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“Housing starts trended lower in February for all dwelling types following a slight uptick in January activity," CMHC's senior Ottawa market analyst Anne-Marie Shaker said in a statement. "The trend in starts has been fairly flat over the last six months with a few spikes in activity mirroring tepid demand conditions for new homes amid weak growth in economic fundamentals such as employment and income."

Housing starts trended at 5,254 in February, down from 5,566 in January. The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR), used to account for considerable swings that may happen in monthly numbers.

February’s SAAR was also down to 3,135 from the 4,818 starts reported in January. The CMHC said a decline in apartment starts in February more than made up for a rise in row starts. While there has been “significant variation” in Ottawa condominium starts in the last few months, the CMHC said the general trend is down from previous years.

Housing starts across the country picked up, the CMHC said, boosted by a jump in multiple-unit dwellings such as condominiums, apartments and townhouses.

But the housing market in the oilpatch continued to struggle as the rate of housing starts in the Prairies headed lower while other major regions of the country saw increases.

“Of all the Canadian economic indicators where the national tally hides the real story, this one is right up there,” BMO Capital Markets senior economist Robert Kavcic said in a note to clients. “On one end of the spectrum, residential construction activity is in outright recession, while on the other, new construction has flared well above past highs.”

The CMHC reported the seasonally adjusted annual pace for housing starts in February increased to 212,594 units, up from 165,071 in January. Economists had expected an annual pace of 180,000, according to Thomson Reuters.

The increase came as multiple-unit urban starts increased by 46.0 per cent to 138,774 units, while single-detached urban starts increased by 6.1 per cent to 61,457 units. Rural starts were estimated at a seasonally adjusted annual rate of 12,363.

However, the regional figures showed the differences across the country.

The pace of urban housing starts in February increased in British Columbia, Ontario, Quebec and Atlantic Canada while decreasing in the Prairies.

CMHC noted that housing starts were trending at a four-year low in the Prairies, where low oil prices have weakened consumer confidence, while starts were trending at an eight-year high in British Columbia.

TD Bank economist Diana Petramala noted that following a weak start to the year, the housing starts have popped back, topping expectations. However, she noted that an unusually warm winter in many parts of the country may be boosting the data.

“Construction normally comes to a near-halt in the winter, but some construction that would have been otherwise delayed until the spring may have gone ahead given the balmy January and February,” she said in a research note.

The increase in housing starts came as Statistics Canada reported municipalities issued building permits worth $6.4 billion in January, down 9.8 per cent from December.

The decline was due to a drop in plans for multi-family homes in British Columbia and Ontario and institutional buildings in Quebec and Alberta, Statistics Canada said.

The value of residential building permits fell 12.5 per cent to $4.0 billion in January, while non-residential permits fell 4.8 per cent to $2.4 billion.

- with files from the Canadian Press

Organizations: CMHC, BMO Capital Markets, Statistics Canada TD Bank Canadian Press

Geographic location: Ottawa, British Columbia, Ontario Quebec Atlantic Canada Alberta

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