Canada Mortgage and Housing Corp. (CMHC) says the pace of housing starts picked up last month, ending a string of modest declines that began in November, but it appears the longer-term trend remains flat.
The agency estimates there were 11,097 starts in February, which extrapolated out over 12 months gives a seasonally adjusted annual rate of 192,094 starts, up from 180,481 in January.
The seasonally adjusted annual rate had a recent peak of 198,282 units in October and declined slightly each month through to January.
However, CMHC deputy chief economist Mathieu Laberge said housing construction levels have been relatively stable since August, with month-to-month variations of two per cent or less.
“This is in line with CMHC’s outlook calling for a stable housing market in 2014,” Laberge said Monday.
In an outlook issued Feb. 6, CMHC predicted there would be about 187,300 housing starts in 2014, ranging between 176,600 and 199,800 units.
That’s relatively unchanged from 187,923 units in 2013.
For 2015, CMHC’s Feb. 6 forecast estimates about 184,900 units, with a range from 163,200 to 206,600 units.
The state of the housing industry is watched carefully as an indicator of the economy’s general health, since construction provides many jobs, mortgage lending is a major business for banks and many Canadian families consider their home to be their biggest investment and asset.
February was the most active month for Canadian housing starts since November, when the seasonally adjusted rate was 192,235 units, and followed especially bad winter weather in December and January.
BMO Capital Markets economist Benjamin Reitzes said there will likely still be “a gentle easing in starts through the course of 2014, consistent with a cooling housing market.”
CMHC said the seasonally adjusted annual rate of urban starts was up 7.5 per cent to 175,584 in February.
Multiple-dwelling urban starts — condos, apartments, etc. — rose 13.3 per cent to 116,458 in February, while single-detached urban starts slipped 2.4 per cent to 59,126.
The report says the seasonally adjusted annual rate of urban starts increased in Atlantic Canada and Quebec.
The rate was stable in Ontario and decreased in the Prairies and British Columbia.
Reitzes said Quebec had the strongest gain of all the provinces in February, rising 56.2 per cent to the highest level in nearly two years.
“Despite the big gain for Quebec, starts over the past year remain near decade-low levels,” Reitzes added in a brief commentary on the CMHC report.