Housing construction showed signs of cooling in April, Canada Mortgage and Housing Corp. reported Tuesday, but economists said the pace remains healthy.
CMHC said the seasonally adjusted annual rate of new home starts pulled back to 214,379 units last month compared with 225,459 in March.
“The pace of starts eased but remained solid in April, supported by continued population and income growth,” TD economist Rishi Sondhi said in a commentary. “Overall, we expect near-term starts to remain elevated — something telegraphed by permit issuance data.”
CMHC said the urban starts decreased by 4.7 per cent in April to a seasonally adjust annual rate of 198,090 units. Within that, multiple urban starts such as condos dipped by 2.7 per cent to 141,032 units in April. Single-detached urban starts decreased by even more — down 9.3 per cent to 57,058 units.
BMO Capital Markets senior economist Robert Kavcic said the April pullback “is no surprise after a heated two-month run.”
Starts fell in Ontario and B.C., but Kavcic pointed out that those two markets are still driving much of the recent upswing in activity.
Starts were up in Quebec, while the Prairies appeared sluggish and Atlantic Canada starts fell last month.
“Looking ahead, we expect the pace of starts to pull-back closer to the [200,000] mark in the second-half of 2018,” Sondhi said, adding that they expected to dip below that level next year as higher interest rates and regulatory changes weigh on demand.