Canadian housing starts rose an unexpectedly strong 13.7 per cent in March, breaking a six-month losing streak thanks to renewed strength in Ontario and Quebec, Canada Mortgage and Housing Corp said Wednesday.
Ground breaking on new homes climbed to a seasonally adjusted annualized rate of 154,700 units from an upwardly revised 136,100 units in February, CMHC said.
Analysts had predicted 130,000 starts in March.
The Canadian dollar strengthened on the data and by 8:25 a.m. was at $1.2331 to the U.S. dollar, or 81.10 U.S. cents, compared to $1.2378, or 80.78 cents, at Tuesday's close.
Construction of urban single-family homes rose 1.3 per cent to 46,400 units last month from 45,800 in February. Construction of multiple dwellings, such as condos, jumped by 28.3 per cent to an annual rate of 81,500 units from 63,500.
"New home construction is now at a more sustainable level after having been exceptionally strong over the past seven years, exceeding 200,000 units per year," the CMHC said in a statement.
Rural starts in March were estimated at an annual rate of 26,800 units, unchanged from February.
The housing downturn in Canada has hit starts, home prices as well as sales activity. Economists describe this as part of a "correction" in the sector, which is expected to last the better part of this year before rebounding in 2010.
