Canada April housing starts edge up, condos strong

Mon May 10, 2010 10:23am EDT
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By Ka Yan Ng

TORONTO (Reuters) - Canadian housing starts inched up 1.3 percent in April, offering further evidence that recovery in the housing sector is a major component of Canada's economic recovery.

New home construction rose to a seasonally adjusted annualized rate of 201,700 units in the month from a revised 199,200 in March, Canada Mortgage and Housing Corp figures showed on Monday.

The April number, however, came in below the average forecast of analysts, who had called for 205,000 starts. The March number was revised up from an originally reported 197,300 units.

"This was only the second time that the pace of housing starts has breached the 200 K-units barrier since November 2008," Millan Mulraine, a senior strategist at TD Securities, said in a note.

The Canadian dollar pulled back slightly after the data was released, but at C$1.0236 to the U.S. dollar, or 97.69 U.S. cents, it was still about 2 percent higher than Friday's close, surging on the back of a European rescue deal.

The seasonally adjusted annual rate of urban starts rose 5.1 percent to 182,500 units as a big jump in the volatile multidwelling group offset a retreat in single-family homes.

The multidwelling group, which includes high-rise condos, climbed 27.2 percent to 98,600 units. Starts in the closely watched single-family component dropped 12.7 percent to 83,900, breaking an 11-month streak of gains.

Market players continue to forecast that home sales will slow in the second half of the year after a spring burst of activity due to higher interest rates, new mortgage rules and the introduction of harmonized sales tax (HST) regimes in Ontario and British Columbia.   Continued...

<p>A construction worker swings his hammer at a new home development in Ottawa in this July 9, 2008 file photo. REUTERS/Chris Wattie</p>