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Canada Housing March 2018

Canada: Housing starts dip in March on weaker multi-unit urban starts; six-month trend ticks up

Housing starts on a seasonally-adjusted annualized (SAAR) basis jumped to 225,200 units in March, according to the Canada Mortgage and Housing Corporation (CMHC). Despite slowing from February’s revised 231,000 units (previously reported: +229,700 units), March’s reading marked ten consecutive months of housing starts above the symbolic 200,000-unit threshold and came in above analysts’ expectations of a sharper slowdown to 218,000 units.

March’s reading reflected a decline in multi-unit urban starts, most visibly in Ontario where new mortgage-lending rules have chilled the once-hot market; and an offsetting increase in single-detached urban starts. A breakdown by city showed that Toronto recorded a sharp drop in multi-unit groundbreaking, as did Montreal. On the other hand, Vancouver posted huge gains, ending the quarter on a strong note and confirming that last year’s legislative measures to cool the runaway market—including the introduction of a foreign homebuyer’s tax—only slowed demand temporarily while buyers priced in the additional costs.

Moreover, the six-month moving average of housing starts (SAAR) ticked higher in March to its highest level in just over a decade, increasing from a revised 225,800 units (previously reported: +225,300 units) to 226,800 units.

A separate report, released by Statistics Canada, showed that the value of Canadian building permits fell in February—the most recent month for which data is available. February’s 2.6% fall in building permits from January was due largely to trimmed-down building plans in Ontario, and especially in Toronto.

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