Canadian builders continued their elevated pace of construction in March, with developers producing another stronger-than-expected result.
Builders began work on an annualized 225,213 units during the month, Canada Mortgage and Housing Corp. said on April 10.
Construction has averaged 226,842 units since October, the highest six-month average in a decade. This represented a jump in construction that has surprised policy makers and analysts, giving a boost to the economy and a vote of confidence in a real estate market coping with tougher regulations.
Sales have slowed in recent months after various levels of government took measures to curb surging prices in places like Toronto and Vancouver.
“Robust residential construction activity continues, led by the major markets,” BMO Capital Markets senior economist Robert Kavcic wrote in a client note, as quoted by Bloomberg.
“The correction we’re seeing – Toronto now and Vancouver recently – still remains largely an asset price phenomenon at the higher end of the market, with underlying demographic demand still strong.”
Housing starts declined 2.5% in March from 231,026 units in February, which was one of the strongest months in the past decade. Economists had expected 216,800 starts, according to the median forecast in a Bloomberg survey.
The March decline was driven by multiple urban starts, which fell more than 7% to 144,578 units, CMHC said. Meanwhile, semi-detached starts climbed almost 10% to 63,659 units.