Canadian housing starts bounce back, prices edge up

Thu May 8, 2014 10:55am EDT
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By Leah Schnurr

TORONTO (Reuters) - New home construction in Canada picked up in April, shaking off the effects of this year's harsh winter, though economists still expect activity to cool gradually in 2014.

The seasonally adjusted annualized rate of housing starts rose to 194,809 last month from 156,592 units in March, data from the Canada Mortgage and Housing Corp showed on Thursday.

That surpassed analysts' expectations for a gain to 175,000.

March's housing starts were revised slightly lower from the 156,823 reported initially.

The volatile figure for multiple-dwelling urban starts surged 35.1 percent to 117,612 units, while single-detached urban starts rose 6.5 percent to 59,180 units.

"A bounce-back in new home construction activity in April had been expected following the sharp outsized drop in the previous month that likely reflected the negative, though transitory, impact of lingering severe winter weather," Laura Cooper, economist at RBC, wrote in a note.

RBC forecasts starts will slow to an overall pace of 181,000 this year from 2013's 188,000.

Canada escaped the U.S. housing crash that accompanied the 2008-09 financial crisis, and home prices have risen sharply, if not steadily, over the past five years.   Continued...

New houses are seen as a construction worker works on building new homes in Calgary, Alberta, May 31, 2010. REUTERS/Todd Korol