* New home prices up for 10th month in a row
* February housing starts rise, beat estimates
* BoC statement reflects more bullish outlook
By Jon Cook
TORONTO, March 8 The Canadian housing
market continued to show signs of strength on Thursday as data
revealed new home prices rose for the 10th straight month in
January and housing starts climbed in February despite
expectations the sector will slow this year.
Prices of new homes edged up 0.1 percent in January from
December, the 10th consecutive monthly increase, mainly on
strength in Calgary and Vancouver, Statistics Canada said on
The rise matched analysts' expectations. Compared with a
year earlier Statscan's price index was up 2.4 percent, slightly
down from 2.5 percent year-on-year growth in December.
Overall, prices were up in eight regions in January, held
steady in nine, and dropped in four. Calgary and Vancouver both
posted 0.3 percent advances over December. The largest region
that Statscan measures, Toronto and Oshawa, Ontario, was flat.
Housing starts rose in February from the previous month as a
significant increase in multiple-unit construction in Quebec
boosted the national number, Canada Mortgage and Housing Corp
The seasonally adjusted annualized rate of housing starts
was 201,100 units, compared with 198,100 a month earlier. The
January figure was revised up slightly from 197,900 units
The number of starts was also mildly above the consensus
expectation of analysts, which had called for 200,000 starts.
"Multiple housing starts in Quebec had fallen nearly 50
percent in January, so February's rise can be seen as a return
to a more normal rate of construction," CMHC Deputy Chief
Economist Mathieu Laberge said in a statement.
The CMHC report showed the seasonally adjusted annual rate
of urban starts rose by 3.4 percent to 182,800 units, following
a near 50 percent increase in Quebec. Urban starts decreased by
15.5 percent in Atlantic Canada and by 16.9 percent in Ontario.
The strong housing data came a day after Bank of Nova Scotia
forecast Canada's housing market will cool off over the next 24
months with home sales and prices remaining near 2011 levels.
On Thursday, the Bank of Canada issued a slightly more
upbeat outlook for the domestic economy, despite holding its key
interest rate at an ultra-low 1 percent. The central bank said
it expected Canada to perform better in the first quarter than
it had forecast previously due to temporary factors.
"In terms of domestically, they highlight that inflation is
slightly higher than they previously expected and that we have
seen some firming in some of the underlying economy," said
Camilla Sutton, chief currency strategist at Scotia Capital.