Housing starts up 18% in March

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The number of housing starts in Ottawa rose 18 per cent in March compared to the year previous, according to numbers released Tuesday by Canada’s national housing agency.

The Canada Mortgage and Housing Corp. said 397 housing units began construction last month, compared to 336 during the same period last year.

Of those starts, 107 were single-detached homes and 289 were multi-family units. That’s up from 74 and 262 in March 2012.

Downtown Ottawa captured the largest share of construction activity this March, according to CMHC. The city’s core has secured just over half of all construction so far this year, with Kanata in a distant second place with 11 per cent of the year-to-date market share.

Housing starts in the Ottawa Census Metropolitan Area were trending at 4,330 units in March, according to CMHC. That number is a six-month moving average of seasonally adjusted annual rates (SAAR) of housing starts.

In Ottawa, the standalone monthly SAAR was 5,102 units in March, up 95 per cent from 2,616 units in February.

“Seasonally adjusted housing starts activity expanded in March from weaker February numbers,” stated Sandra Perez-Torres, senior market analyst for eastern and northern Ontario, in a company release.

Condominium construction saw the strongest growth pace because of demographic demands, she added.

“Nevertheless, a moderation in starts activity for the Ottawa CMA is already underway, and is in line with CMHC expectations for the year,” she said.

Across the country, the pace of housing starts crept up slightly in March from the previous month, despite a drop in the number of single dwellings in some urban markets.

CMHC also noted that starts in March totalled 12,273, down from 14,517 in the same month last year, pointing to an ongoing trend of slower activity in the housing sector.

The agency estimated housing starts in March came in at a seasonally adjusted annual rate of 184,028, just over the 183,207 figure in February.

The slight increase came as the annual rate of starts in urban markets slipped 2.7 per cent in March to 157,217 units, as starts of condos, apartments and other multiple-unit buildings remained steady but starts of single urban homes fell.

Emanuella Enenajor, an economist at CIBC World Markets, said the overall numbers were in line with her expectations but better than a consensus estimate calling for the seasonally adjusted rate to fall to 175,000 in March.

That suggests a sharp deceleration in home building recorded early in 2013 may have overstated the sector's weakness in the near term but there's still pressure from a slowing economic environment, Ms. Enenajor wrote.

“While the 184K pace marks an improvement from the winter lull, it is still well below the pace seen late last year and continues to point to an overall deceleration in homebuilding,” Ms. Enenajor said.

- With files from the Canadian Press