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Canadian housing surge grows

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Canadian housing starts have increased for the first time in six months, according to official figures

The Canada Mortgage and Housing Corporation calculated a seasonally adjusted annualised rate of 180,719 units in February.

This was up from 158,998 in January, driven by multi-family home schemes in Ontario and Quebec. It represents the first rise in new housing projects since last summer, when the annualised rate was above 200,000.

However, the long period of decline means the closely-watched trend figure – calculated as a six-month moving average – declined to 195,087 in February.

CMHC deputy chief economist Mathieu Laberge said: ‘The trend in total housing starts continued to moderate in February.

‘Moderation in economic fundamentals in the second half of 2012 has led to more modest housing demand and builders are adjusting accordingly.’

A 28 per cent hike in multiple urban starts to 99,022 units led the way in February. Single urban starts rose by 6 per cent to 62,609 units.

Urban starts increased by a whopping 47 per cent in Ontario and by 35 per cent in Quebec.

There were marginal increases in urban starts in British Columbia and the Prairies but a 31 per cent drop in Atlantic Canada (-31.7 per cent).

Rural starts were estimated at a seasonally adjusted annual rate of 19,088 units in February, making up little more than 10 per cent of the total.

Royal Institution of Chartered Surveyors economist Himanshu Wani said late last year that despite house prices falling, a crash was unlikely. 

‘With the Canadian economy continuing to post modest if unspectacular growth, and moderately loose lending conditions, a sharp decline in prices nationally is unlikely, he said in December.

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