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

RCMP investigating break-and-enter attempts in Fernie

Police are investigating four reports of attempted break-and-enters at the condos and… Continue reading

Fernie food share program thrives under new partnership

Four times the amount of food is being saved from landfill under… Continue reading

Paramedics union raises alarm over spike in out-of-service ambulances

Staffing shortages affecting service levels in Kootenays

Fernie skier braves extremes to find ‘soul line’

Caleb Brown named male champion at backcountry ski competition

Avalanche warning issued for Lizard Range, Flathead near Fernie

Warmer weather to increase avalanche risk: Avalanche Canada

‘Full worm super moon’ to illuminate B.C. skies on first day of spring

Spring has sprung, a moon named in honour of thawing soil marks final super moon until 2020

B.C. lottery winner being sued by Surrey co-workers

They claim he owes them $200,000 each, in a lawsuit filed in B.C. Supreme Court in Vancouver

Fraser Health under fire again for taxiing homeless man from Langley to Hope

Patient sent to Hope shelter because a spot in the man’s home community couldn’t be located

Dead sea lion discovered on Hornby Island shoreline

Reports indicate animal was shot in the head

Celina Caesar-Chavannes quits Liberal caucus, sits as independent MP

The Whitby, Ont., MP has been a vocal supporter of Jody Wilson-Raybould and Jane Philpott

Woman punched on the sidelines of B.C. soccer game

Both involved were watching the U21 game in West Vancouver from the sidelines when things got heated

Catch-up immunization aims to stamp out B.C. measles resurgence

Vaccination records to be checked at B.C. schools next fall

Paramedic staff shortage at critical level: B.C. union

A number of units were out of service due to lack of staffing in Lower Mainland, union says

B.C. dairy farmers say federal budget not enough to cut losses from USMCA

Concerns raised over vague details, funding access and impacts on growth

Most Read