Canada’s housing starts rose strongly in the month of February. Housing starts grew 229.7k, up 7 percent sequentially. The underlying trend remained the same at 225k over the last six months. Urban area starts in the multi-family segment rose 15 percent to 155k; however, they were countered by the single-detached segment where builders broke ground on 57k units, down 10 percent from the previous month.
The gain was greatly focused in Ontario, where starts rose 21k to an eye-popping 107k units. This is likely above the underlying rate of household demand, noted TD Economics in a research report. Starts were also higher in Quebec, P.E.I and Nova Scotia, with a flat performance in Manitoba. On the contrary, starts dropped in the remaining five provinces. In Toronto, starts rose sharply by 31k to 71k, driven by the multi-family segment. On the other hand, starts fell in Vancouver by 12k to 20k.
Homebuilding in Canada continues to defy expectations, with another strong print in February. Starts are being stimulated by a comparatively strong economic backdrop, sound population growth and past gains in pre-construction sales in Toronto. But, February’s rise was driven by the volatile multi-unit sector, leaving some scope for reversal in March. This reversal seems all the more assured given the high numbers in Ontario, stated TD Economics.
“While the pace of starts has held up so far this year, we maintain that cooling demand in the face of restrictive policy measures and higher rates will ultimately slow starts going forward”, added TD Economics.
At 21:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 163.759, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -14.012. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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