(Adds regional data, economist comment)
By Andrea Hopkins
TORONTO, April 10 Canadian housing starts rose
much more sharply than expected in March as groundbreaking on
new condominiums and apartments in urban areas surged 48.2
percent, while February numbers were revised slightly lower,
data showed on Friday.
The report from the Canadian Mortgage and Housing Corp
showed the seasonally adjusted annualized rate of housing starts
rose to 189,708 units last month from a downwardly revised
151,238 units in February. This exceeded the 175,000 that
economists had expected.
CMHC and private-sector economists both pointed to the
six-month average as a better gauge of new home construction
given the recent volatility in the data.
"Note that these numbers represent very small levels of
not-seasonally-adjusted activity as very little actual
construction happens in Canada during the frozen winter months,"
Scotiabank economist Derek Holt said in a research note.
The six-month trend of housing starts showed 179,016 units
in March compared to 180,236 in February, essentially unchanged.
Canada escaped the U.S. housing market crash and the housing
market has climbed unsteadily higher since 2009, driving prices
to record highs, particularly in Toronto and Vancouver.
Economists are divided over whether the boom, which is
showing signs of slowing, will end in a U.S.-style crash or a
soft-landing. Housing construction is forecast to weaken in the
months to come, particularly in the resource-dependent province
of Alberta, where a drop in oil prices is hurting the economy.
But continued low interest rates have bolstered demand for
homes even as the economy has struggled to gain momentum.
"While we are bracing for more regional weakness in housing,
lower interest rates are expected to provide a potent offset,"
David Tulk, chief Canada macro strategist at TD Securities, said
in a research note.
Urban starts led the March increase, up 28.1 percent.
Construction of multiple-family units - typically condos - rose
48.2 percent to 125,263 units, while single-detached urban
starts decreased 3.4 percent to 52,196 units.
Starts increased in Ontario, British Columbia, Quebec and
the Prairies, while decreasing in Atlantic Canada, CMHC said.
(Reporting by Jeffrey Hodgson Editing by W Simon)