Housing starts begin the year with a bang
Housing starts in
Housing starts rose to 222,700 on a seasonally adjusted and annual basis, Canada Mortgage and Housing Corp. said Friday, up from 184,700 in December and more than economists had forecast.
“Historically low mortgage rates, solid employment and income growth, as well as a high level of consumer confidence, continue to underpin the high level of housing starts,” said Bob Dugan, chief economist at CMHC's Market Analysis Centre, adding that January's starts rebounded to a level more consistent with 2008 expectations of 211,700.
That would mark the seventh consecutive year of starts above 200,000.
“Combined with strong employment numbers released earlier this morning, this report suggests that economic activity picked up in January after a short end-of-year break in Canada,” said senior economist Robert Hogue of BMO Capital Markets. “Even so, housing construction is expected to slow moderately during 2008, which will restrain growth in coming quarters.”
Ted Carmichael, chief Canadian economist at JPMorgan Chase, noted the data show
Housing starts peaked in the first quarter of 2006 in both countries. Since then, he pointed out, starts in the
CMHC, the national housing agency, noted that urban housing starts, also seasonally adjusted and at an annual rate, surged more than 25 per cent in January to 189,500 from December.
Multiple units soared more than 64 per cent, while singles fell almost 5 per cent.
Construction increased in four of the five regions measured by CMHC — 43.7 per cent in Ontario, 22.4 per cent in Quebec, 19.4 per cent in the prairie provinces and 17.5 per cent in British Columbia. Building declined in the Atlantic region.
Year over year, the actual number of starts in urban and rural areas fell about 11 per cent from January, 2007, the agency said.
“We expect the Canadian housing market to remain in fairly good shape in 2008 and to remain an important source of economic activity in
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