Canada Home Starts Post Surprise January Gain on Multi-Units

Canadian housing starts posted a surprise gain in January led by multiple-unit projects, government figures showed.

The annual pace of home starts rose 4.3 percent to 187,276 units on a seasonally adjusted basis, Ottawa-based Canada Mortgage & Housing Corp. said Monday. Economists forecast a reading of 178,500 according to the median of 17 responses in a Bloomberg News survey.

Low mortgage rates and a steady jobs market have supported housing, even as policy makers warn record consumer debt burdens are a major risk to the world’s 11th largest economy. Mortgage rates fell again this year after major lenders matched part of the surprise rate cut on Jan. 21 by Bank of Canada Governor Stephen Poloz.

“Overall, economic and demographic factors remain supportive of housing demand,” CMHC chief economist Bob Dugan said in the report.

Multiple-unit starts in urban areas advanced 12.3 percent to 115,008. Single-family starts fell a third straight month in January, by 3.8 percent to a pace of 57,314 units.

The housing agency last week cut its 2015 forecast for work on new homes, saying the pace would fall 1 percent to 187,400 units as lower oil prices hurt Alberta, Saskatchewan, and Newfoundland and Labrador.

Today’s report showed that work on new homes in Calgary, a hub of the oil industry, fell to 10,049 in January from 10,222 in December.