Housing starts tumbled in February: CMHC

Canadian housing starts tumbled in February as the market remained soft, Canada Mortgage and Housing Corp. said Monday.

CMHC reported that the seasonally adjusted annual rate of housing starts fell to 134,600 units last month, down from an annualized rate of 153,500 units in January.

"Increased listings and reduced sales in the existing home market continue to impact the new home market," said Bob Dugan, chief economist at CMHC's market analysis centre.

"The decrease in February housing starts is partly attributable to the volatile multiple starts segment. In any given month and given its relative importance, the volatility of the multiple starts segment can exaggerate monthly movements up or down in the rate of housing starts," Dugan said.

The seasonally adjusted annual rate of urban starts decreased 14.9 per cent to 107,800 units in February. Urban multiple starts such as condominiums decreased 17.5 per cent to 63,300 units, while urban single starts fell 11 per cent to 44,500 units in February.

CMHC said seasonally adjusted annual rate of urban starts moderated in February in all of Canada's regions except Atlantic Canada, where urban starts increased by 10.8 per cent.

Urban starts fell by 19.6 per cent in Quebec, 14.4 per cent in Ontario, 19.4 per cent in the Prairies, and 12.8 per cent in British Columbia.

CMHC said overall starts are forecast to come in at 160,250 units, within a range of 141,000 to 180,000 units in 2009, following seven years of starts topping 200,000 units.

"The Canadian housing correction is in full swing with starts now well below the rate of household formation, offsetting the overbuilding of the past five years," said BMO Capital Markets' Robert Kavcic. "With sales activity showing little sign of life, housing starts should average a sluggish 150,000 units in 2009."