B.C. Housing Starts Jump In May; Canadian Figures Up Slightly
VANCOUVER - Home construction starts in Canada rose slightly more than expected in May, with B.C. recording a one-third increase in starts over April.
Canada Mortgage and Housing Corp. said Wednesday the seasonally adjusted annual rate of construction was 183,600 units during the month, up from 178,700 units in April, with the increase mainly attributed to the multiple-unit sector.
Economists had expected between 182,000 and 183,000 units in May.
"Housing starts increased modestly in May due to an increase in multiple construction in most provinces and in rural starts," CMHC chief economist Bob Dugan said. "The increase in multiples and rural starts was partly off-set by a decrease in single starts."
Urban starts rose 0.8 per cent to 161,000 units in May, with multiple-unit construction up four per cent to 100,000 units, while single starts fell 4.1 per cent to 61,000 units.
In B.C., urban construction was up 33.3 per cent to about 30,000 units, while Quebec recorded a 13.5-per-cent rise. The Atlantic region saw an 11-per-cent increase and the Prairies were up 10 per cent.
Urban starts in Ontario dropped 22.9 per cent.
Meanwhile, rural starts totaled 22,600 units in May, up from 18,900 the previous month.
"We may see some softness ahead for housing," said CIBC World Markets economist Krishen Rangasamy. "We expect housing starts to continue to soften as home prices stagnate in light of higher interest rates in the second half of the year."
Rangasamy said "this isn't a great report, considering that starts were in the 200-250K range before the recession."
Wednesday's report follows a Statistics Canada survey released earlier this week that showed B.C. experiencing a sharp decline in the non-residential sector.
The report pegged the value of B.C.’s non-residential permits at $193 million, a 39-per-cent drop from March, and a 24.4-per-cent increase over April 2010.
That report also concluded that the value of residential permits in B.C. reached $471 million in April – a 13.1-per-cent increase from March and a 10.8-per-cent increase over April 2010.