• Canadian housing starts registered a healthy 210.1k pace in February, slightly slower than January’s 214.0k rate. The print was essentially in-line with market expectations.
  • A 12% gain in urban starts of single-family units was offset by a 6% drop in the urban multi-family sector. However, the latter only partially retraced January’s 14% gain.
  • Starts retrenched significantly in Quebec (-28.1k to 49.3k units) – driving the Canadian decline – although that was after the strongest print since early 1990 in January. Elsewhere, starts were lower by 5.0k in the Prairies, with similar declines observed across Alberta, Saskatchewan, and Manitoba. Starts were also lower in New Brunswick (-0.6k to 1.7k units).
  • On the flipside, starts were higher by a combined 6.4k units in the remainder of the Atlantic Region, driven primarily by Nova Scotia. Starts also climbed in Ontario (+10k to 79.6k units – the highest since last September) and B.C. (+13.7k to 40k units). A spike in permit issuance in January (also reported today), points to B.C.’s momentum being retained in coming months.

Key Implications

  • Steady Eddy. Homebuilding continues to hum along at a healthy pace, supported by rising home prices, low interest rates, programs incenting rental construction and, most importantly, strong population growth. This is helping underpin gains in residential investment at a time when other parts of the economy are suffering from an array of headwinds. And, strong permit issuance in January (even outside of B.C.’s outsized gain), points to this healthy pace being retained in the near-term.
  • Currently, we are expecting starts to hold above a 200k unit pace through next year. However, this depends on the evolution of the novel coronavirus, which alongside the recent plunge in oil prices, places downside risk to this view.


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