Canadian housing starts rebounded faster than economists forecast in April on an increase in multiple-unit projects, government figures showed.
Work on new homes accelerated to 194,809 units at a seasonally adjusted annual pace, a 24 percent increase that followed March’s 18 percent drop, Ottawa-based Canada Mortgage & Housing Corp. said today. The rise exceeded all 18 forecasts in a Bloomberg economist survey that had a median of 175,000 units.
“Multis are showing resilience,” said Krishen Rangasamy, senior economist at National Bank Financial in Montreal. “The improving economy and low interest rates are helping, although we doubt such gains in residential construction are sustainable.”
Builders of condominiums and apartments will continue to adjust production to control any buildup of unsold inventory, the housing agency said in a statement. Bank of Canada Governor Stephen Poloz says the country’s housing market is headed for a “soft landing,” and record consumer debt levels are one reason he is “neutral” on the next move in his 1 percent policy interest rate.
Multiple-unit urban starts rose 35 percent to 117,612 in April, following a 26 percent drop in March, according to the CMHC report. Work began on single-unit homes at an annualized pace of 59,180, a gain of 6.5 percent.
“Over the remainder of the year, builders are expected to continue to adjust activity, particularly with respect to multiples, in order to manage inventory levels,” CMHC deputy chief economist Mathieu Laberge wrote in the report.
The Canadian dollar appreciated 0.2 percent to C$1.0876 per U.S. dollar at 9:17 a.m. in Toronto.
In a separate report today, Statistics Canada said its index of new home prices rose 0.2 percent in March from February, and gained 1.6 percent from 12 months earlier.