Bucking the national trend, housing starts in Ottawa-Gatineau surged last month compared with a year earlier, the Canada Mortgage and Housing Corp. reported Monday.
Builders in the region launched a total of 1,178 new units in February, up 45 per cent from the same month in 2019, CMHC said. The number of single-detached starts more than doubled to 176, while new multi-unit builds – which include condos, apartments and townhomes – jumped 38 per cent to 1,002.
Homebuilders in Gatineau saw a particularly large spike in activity, starting 23 new semi-detached properties in February – an increase of 188 per cent. That brought the total number of starts last month in Gatineau to 393, up 203 per cent year-over-year. In Ottawa, meanwhile, the total number of starts rose 15 per cent to 785.
The region’s annual pace of housing starts also shot up dramatically in February. CMHC said the seasonally adjusted annual rate of new builds in Ottawa-Gatineau rose from 9,054 in January to just over 17,000 last month, an increase of 88 per cent.
That contrasted sharply with the picture in much of the rest of Canada, although the annual pace of housing starts still came in stronger than economists had expected.
CMHC said Monday the seasonally adjusted annual rate of housing starts slipped to 210,069 units in February compared with 214,031 in January.
Economists on average had expected an annual pace of 205,000 for February, according to financial markets data firm Refinitiv.
“Homebuilding continues to hum along at a healthy pace, supported by rising home prices, low interest rates, programs incentivizing rental construction and, most importantly, strong population growth,” TD Bank economist Rishi Sondhi wrote in a report.
However, Sondhi noted that the evolution of the novel coronavirus, which alongside the recent plunge in oil prices places downside risk to the bank's outlook for housing starts this year.
Stock markets, which have been under pressure in recent weeks amid concerns about the impact of COVID-19, plunged in trading Monday as the price of oil collapsed.
CMHC said Monday that urban housing starts fell 1.9 per cent in February to 199,304 units on a seasonally adjusted annualized basis. The annual rate of multi-unit urban starts such as apartments, condos and townhouses fell 6.1 per cent to 146,072 units, while urban starts of single-detached homes rose 11.9 per cent to 53,232.
Rural starts were estimated at a seasonally adjusted annual rate of 10,765 units.
The six-month moving average of the monthly seasonally adjusted annual rates was 208,525 in February compared with 211,153 in January.
The Bank of Canada cut its key interest rate last week in a bid to give the economy a cushion from the effects of COVID-19.
Governor Stephen Poloz said the immediate effects the virus will have on business investment and consumer spending meant the downside risks to the economy today outweighed continuing concerns that cutting rates would fan financial vulnerabilities in Canada, such as high household debt.
– With files from the Canadian Press