February housing starts climb
Housing activity picked up speed last month, exceeding expectations as builders broke ground on condominiums and other multiple-unit dwellings. Housing starts rose to 196,700 units in February, on a seasonally adjusted annual rate, from 185,400 units in January, Canadian Mortgage and Housing Corp. reported. Home building has come back to life after the recession caused housing starts to fall below 120,000 last spring. Low borrowing costs and a rush to beat a provincial sales tax in B.C. and Ontario are spurring demand. The pace may not continue though in the latter half of this year as interest rates rise and demand tapers off. February’s gains were concentrated in the multiple starts segment which includes condos, town houses and duplexes. Ontario led the country’s starts with a 28.6 per cent increase. They rose 14.3 per cent in Atlantic Canada, 10.8 per cent in the Prairie region and eight per cent in B.C. In Quebec, they fell 14.1 per cent.
Home-buying intentions remain strong, according to a poll by the Royal Bank of Canada. The portion of Canadians who are very likely to purchase a home in the next two years has risen to 10 per cent from seven per cent two years ago, according to RBC’s home ownership study. Young Canadians (aged 18 to 24) will lead the demand this year, with those very likely to buy almost doubling to 15 per cent from eight per cent in 2009 the report showed. Most Canadians also believe house prices will rise this year. Six in 10 think prices will go higher, up from 29 per cent in 2009. And 64 per cent believe mortgage rates will be higher over the next year, up from 33 per cent in the last survey.