Canadian housing starts slow as BoC rate hikes weigh
Reuters
Published Apr 19, 2023 08:51AM ET
Updated Apr 19, 2023 11:36AM ET
By Fergal Smith
TORONTO (Reuters) -Canadian housing starts fell more than expected in March, contributing to a slower trend in recent months that follows a rapid increase in borrowing costs, data from the national housing agency showed on Wednesday.
The seasonally adjusted annualized rate (SAAR) of housing starts fell 11% to 213,865 units from a revised 240,927 units in February, the Canadian Mortgage and Housing Corporation (CMHC) said. Economists had expected starts to fall to 237,800.
"The SAAR of housing starts and the trend appear to be returning to pre-pandemic levels," Bob Dugan, CMHC's chief economist, said in a statement.
"With interest rates remaining high, it continues to be challenging for developers and homebuilders to get projects started."
The Bank of Canada has lifted its benchmark interest rate to a 15-year high of 4.50% to tackle inflation. It paused its tightening campaign in March after eight consecutive rate hikes.
For the first quarter, starts averaged 223,000, the weakest quarter since the depth of the COVID-19 pandemic in early-2020, Robert Kavcic, a senior economist at BMO Capital Markets, said in a note.
The slowdown in residential construction could frustrate Canadian government plans to ease a supply shortfall and keep up with record population growth.
"We are still seeing a historically robust level of activity, but the downward turn is going to confound policymakers that have been pushing for a doubling of output," Kavcic said.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.