Canada: Housing starts decrease less than expected in February
Housing starts declined to 210,069 units on a seasonally-adjusted annualized rate (SAAR) basis in February, according to the Canada Mortgage and Housing Corporation (CMHC), down from January’s upwardly revised 214,031-unit reading (previously reported: 213,224), and above analysts’ expectations of 205,000 units. February’s fall was driven by a dip in starts of multi-units in in urban areas.
Meanwhile, the six-month average of housing starts on a SAAR basis fell to 208,525 units in February from 211,153 units in January.
Looking to the second quarter, Covid-19 will weigh heavily on the construction sector, in Ontario construction activity will likely remain fairly steady as the provincial government declared the industry essential. That said, authorities in Quebec have only declared emergency construction essential and will suspend the majority of housing projects until the virus is contained.
Nevertheless, activity on new starts will eventually benefit from rapid population growth, favorable borrowing costs and government measures supporting first-time home buyers once Covid-19 passes and economic conditions return to normalcy.