Housing starts still down for 2014 despite March boost: CMHC

OBJ Staff
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The number of housing starts in Ottawa shot up in March, but not enough to reverse the home construction market’s tepid start to 2014.

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There were 427 starts last month, according to numbers the Canada Mortgage and Housing Corp. released on Tuesday. That’s up from 397 during the same month in 2013.

A rise in construction of multiples, which includes apartments and row houses, largely drove the increase. Those units increased to 373 from 289 in March 2013 while single-detached construction dropped to 54 from 108 last year.

The slight increase in total housing construction wasn’t enough to overcome what has been a slow start to the year for the local market. So far in 2014 there have been 774 housing starts, down from 1,081 during the first three months of last year.

CMHC’s preferred metric for measuring housing starts – a six-month moving average of seasonally-adjusted annual rates – recorded a decrease in starts. That number was trending at 4,509 in March, down 4,905 units in February.

"Seasonally adjusted housing starts activity picked up in March on the back of (a) slightly higher number of apartment units started,” said Sandra Perez Torres, CMHC’s market analyst for the region, in a statement.

“Nevertheless, strength in apartment construction will be short lived as its starts return to historical trends after record levels in the two previous years.”

The jump in apartment construction activity meant that most of the starts took place in the city core, according to CMHC. Cumberland was next, followed by Kanata and Nepean.

Ms. Perez Torres said the CMHC is anticipating interest will increase in one portion of the multiples segment.

“Strong income growth in the Ottawa region coupled with low mortgage rates will continue to stimulate demand for townhomes,” she said in the statement. “Townhomes provide bigger living spaces, while remaining at reach of first-time home buyers.”

Nationally the CMHC said the pace of housing starts slowed in March.

The agency says there were 10,781 actual starts in the month, which extrapolated out over 12 months produces a seasonally adjusted annual rate of 156,823 starts.

That's down from 190,639 starts on the same adjusted basis in February.

On a seasonally adjusted annual basis, urban starts were down 18.8 per cent in March.

On the same basis, multiple urban starts decreased by 25.5 per cent while single-detached urban starts segment slipped by 5.4 per cent.

The seasonally adjusted annual rate of urban starts increased in British Columbia and the Prairies and decreased in Atlantic Canada, Ontario and Quebec.

–With files from The Canadian Press

Organizations: Canada Mortgage and Housing

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

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