CMHC reports annual pace of housing starts slowed in February

Economists had expected an annual pace of 205,000

The annual pace of housing starts slowed in February as higher mortgage rates and less stimulative economic conditions helped soften demand, Canada Mortgage and Housing Corp. said Friday.

The housing agency said the seasonally adjusted annual rate of housing starts fell to 173,153 units in February compared with 206,809 units the month before.

Economists had expected an annual pace of 205,000, according to Thomson Reuters Eikon.

“As a leading indicator of economic activity, February’s steep decline in housing starts may raise some eyebrows in Ottawa,” Fotios Raptis, senior economist at TD Bank, wrote in a report.

“Although housing starts seemed to be unscathed by the new B-20 regulations that took effect in January 2018, higher borrowing costs and tougher mortgage qualifying conditions may finally be taking a toll on new residential construction.”

The slowing housing starts come as sales of existing homes has also been slowing. The Canadian Real Estate Association reported home sales posted their weakest January since 2015.

Rising mortgage rates and tighter lending rules have been blamed for the slowdown in sales, prompting some to call on the federal government to make changes in the upcoming federal budget to help first-time homebuyers.

CIBC economist Royce Mendes said 2019 is shaping up to be a tougher year for homebuilding.

READ MORE: CMHC sets target to make housing affordable for every Canadian by 2030

“Residential investment was downright ugly in the fourth quarter, and the latest reading on housing starts only added to the bad news on Canadian homebuilding,” Mendes wrote.

“Prior to this reading, starts had seen a bit of a renaissance, rising back above 200,000 for four straight months. But the market has been a contending with the effects of higher interest rates and stricter lending standards, and a pace of 200,000 looked unlikely for the year as a whole.”

The overall decline in the pace of housing starts came as the annual rate of urban starts fell 18.0 per cent in February to 155,663 units.

The pace of urban multiple-unit projects such as condominiums, apartments and townhouses fell 20.2 per cent to 116,284 units, while single-detached urban starts dropped 10.6 per cent to 39,379 units.

Rural starts were estimated at a seasonally adjusted annual rate of 17,490 units.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 203,554 in February, down from 207,742 in January.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Slocan Valley to be ‘lit up’ with high-speed internet in 12 months

125 kilometres of fibre-optic cable to be laid from Nakusp to Playmore Junction

Police bust drug operation in Castlegar

Man charged, will go to court in August

Vigil re-affirms belief in peace, acceptance in wake of New Zealand massacre

Nearly 100 show up for solemn event at Mir Centre for Peace

RED resort announces new ski lift

Topping lift will add new ski area to resort, reduce bottleneck on Motherload chair

Update: Bodies recovered from Pend d’Oreille River crash

To help support the family, a fundraiser has been set up at Kootenay Savings in Fruitvale

‘Families torn apart:’ Truck driver in fatal Broncos crash gets 8-year sentence

Judge Inez Cardinal told court in Melfort, Sask., that Sidhu’s remorse and guilty plea were mitigating factors

WestJet sticking with Boeing 737 Max once planes certified to fly

WestJet had expected to add two more of the planes this year to increase its fleet to 13

B.C. driver caught going 207 km/h on motorcycle along Okanagan Highway

A motorcyclist was caught by Kelowna RCMP going 207 km/h on Highway 97C

Protective human chain forms around B.C. mosque for Friday prayer

Vancouver Islanders stand arm-in-arm to show support in aftermath of New Zealand shootings

B.C. fire department offers tips to keep your home safe during wildfire season

With wildfire season getting closer, the Penticton Fire Dept. offer tips to keep your home safe

Rural Kootenay communities to receive high-speed internet upgrade

The provincial government is increasing internet connectivity to rural British Columbia

Fierce house cat spotted as ‘aggressor’ in face off with coyote in B.C. backyard

North Vancouver resident Norm Lee captures orange cat versus coyote in backyard showdown

Wilson-Raybould to reveal more details, documents on SNC-Lavalin affair

Former attorney general has written to the House of Commons justice committee

Anti-discrimination group wants to map offenders with cross-Canada hate atlas

Morgane Oger Foundation issues call for volunteers to help build Canadian Atlas of Populist Extremism

Most Read