TORONTO (Reuters) - Canadian housing starts declined in April from March as groundbreaking for new condominiums slowed and low oil prices took a bite out of building in Alberta, a report from the country’s housing agency showed on Friday.
The Canadian Mortgage and Housing Corp report said the seasonally adjusted annualized rate of housing starts fell to 181,814 in April from a downwardly revised 189,546 units in March. Forecasters had expected 182,000 starts.
Condo starts slipped 14.2 percent to 107,216, a drop that should assuage some concerns about overbuilding in a sector that has seen a boom in construction in recent years, particularly in Toronto. Single-detached starts rose 11.4 percent to 58,229.
Robert Kavcic, senior economist at BMO Capital Markets, said the April slowdown marked a more normal level of homebuilding after weather-related swings in recent months.
“Smoothing out the gyrations leaves housing starts sitting at an average pace of 187,000 over the past year, and 176,000 through the first four months of the year - in a nutshell, the story remains that we’re building what we need in Canada,” Kavcic said in a research note.
Canada’s long housing boom has ended in several key markets, including Calgary and Edmonton, where a decline in oil prices has slowed demand, but construction and buyer demand has continued in Toronto and Vancouver, the two largest markets.
“All told, not much to move markets, since housing starts continue on their broadly sideways trend since mid-2013,” CIBC World Markets economist Nick Exarhos said in a research note.
The report showed starts were higher in British Columbia, where Vancouver’s hot housing market continues to surge, and in the much smaller Atlantic market.
Groundbreaking slowed in the Prairies, where a drop in oil prices has sideswiped the resource-dependent economy, particularly in the energy heartland of Alberta.
Quebec starts also declined, while construction in Ontario was essentially flat.
“In Alberta, we’re now seeing signs that the slide in oil prices is biting residential construction activity, while strong markets in Vancouver and Toronto are supporting activity,” Kavcic said.
Additional reporting by Jeffrey Hodgson; Editing by Bernadette Baum