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Canada Housing Starts Rise to 154,700 Units in March (Bloomberg)
April 8 (Bloomberg) -- Canadian housing starts rose for the first time in seven months in March on higher construction of multiple-unit buildings.
The annualized rate of 154,700 units increased from a more than eight-year low of 136,100 units in February, Canada Mortgage and Housing Corp. said today from Ottawa. Economists anticipated the pace of starts would slow to 130,000 units from an initially reported 134,600 units, according to the median of 21 responses in a Bloomberg survey.
The Bank of Canada estimated in January that housing will cut 1 percentage point from growth this year as increasing job losses and falling incomes lower demand for homes. Today’s numbers probably don’t reflect a housing rebound, said Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce.
“This may be a sign that the February trough was exaggerated to the downside rather than an indication that housing has momentum,” Shenfeld said in a telephone interview. “Given what we know about employment trends and the state of the economy, it’s hard to imagine housing starts trending higher over the balance of the year.”
Canada’s unemployment rate is expected to rise to a seven year high of 8 percent in March, as the country faces its first recession since 1992, according to a survey of economists by Bloomberg. The March employment report is due tomorrow at 7 a.m. New York time.
The world’s eighth-largest economy probably contracted the most since at least 1961 in the first quarter, Bank of Canada Governor Mark Carney said last week.
Canada’s housing agency predicts the economic slowdown will reduce new home starts by 24 percent to 160,250 units in 2009. New home starts have averaged an annual pace of 148,100 in the first three months of this year.
Earlier this week, Statistics Canada reported that building permits declined for a fifth straight month in February to its lowest level since January 2002.
“Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” Bob Dugan, the housing agency’s chief economist, said in a statement. “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”
The Canadian currency appreciated following the report. It was trading at C$1.2322 per U.S. dollar at 9:34 a.m. in Toronto, 0.4 percent stronger than C$1.2372 yesterday.