WRAPUP 1-Canadian housing starts, permits drop as market cools

Tue Apr 8, 2014 12:13pm EDT
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* Housing construction drops, expected to cool long term

* Economists note monthly volatility, frigid winter weather

* Overall housing market seen slowing after long boom

By Andrea Hopkins

TORONTO, April 8 (Reuters) - Canadian housing starts fell more than expected in March and building permits dropped sharply in February, according to data released on Tuesday that suggests the country's robust housing market is cooling.

Volatility in the housing data and an especially hard winter may explain some of the unexpected weakness in the data, economists said. But the figures still bolstered expectations that home building was starting to slow after a boom that observers have warned is unsustainable.

"The steep decline in housing starts in March was at least partly weather related, but the bigger picture is an ongoing cooling of residential construction activity in Canada," BMO Capital Markets senior economist Robert Kavcic wrote in a research note.

Housing starts fell 17.7 percent in March to a seasonally adjusted annualized rate of 156,823 units, well below an economists' forecast for 191,000 units.

February's housing starts were also downwardly revised to 190,639 from the 192,094 originally reported, Canada Mortgage and Housing Corp (CMHC) said.   Continued...