Canada housing starts speed up in March
By Louise Egan
OTTAWA (Reuters) - Canadian housing starts grew faster than expected in March, led by a surge in construction of multiple units that fueled concern about possible over-building in the Toronto condo market.
Canada Mortgage and Housing Corporation (CMHC) said on Wednesday that housing starts rose to 215,600 units on a seasonally adjusted annualized basis in March, up from 205,300 units in February.
Analysts in a Reuters poll had expected 200,000 starts in a housing sector that never suffered the downturns seen in the United States and other places. The overall housing market remains robust, with bidding wars for single family homes in centers like Toronto and Vancouver.
Policy makers and economists are watching for signs the property market is softening, given that some markets appear overvalued.
The high housing prices, combined with extremely low interest rates, have tempted Canadians to take on record levels of debt, and experts say an estimated 10 percent of borrowers could be in trouble if rates climbed to more normal levels.
"Although we expect starts to soften in due course, the latest figures suggests that, for time being, the housing sector still has a considerable amount of energy, aided by low financing costs," said Peter Buchanan, analyst with CIBC World Markets.
Urban starts rose 4.2 percent to 192,100 units in March, driven largely by an 8.3 percent jump in multiple urban starts, while single starts were up a more modest 2.4 percent, the federal housing agency said. Continued...