Data from the Canadian Mortgage and Housing Corp shows more homes were started this January than expected, particularly for multi-unit buildings.
The seasonally adjusted annualized rate of housing starts jumped to 187,276 units last month from a downwardly revised 179,637 in December – a huge jump from the 178,000 economists had expected. Moreover, new constructions in the multi-units category soared to 115,008 from 102,384.
However, a downward trend is seen in single-detached units as starts went down to 57,314 from 59,556. Rural areas also saw a decline to 14,954 from 17,697.
David Tulk, chief Canada macro strategist at TD Securities in Toronto, believes the decrease in new constructions for these areas should continue over the course of the year due to weakness in regions tied to the energy sector and hurt by lower oil prices. Still, that could be counterbalanced by cheaper mortgages, he said
“The impact of lower rates across the rest of the country may inspire greater demand, which will provide a partial positive offset and speak to the theme of a better regional balance across the country," he said.
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