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A surge in home construction is stirring new worries about Canada’s hottest housing markets.
Building permits jumped to an annualized rate of 213,000 last month -- led by booming condo and apartment construction. That’s prompting concern among economists, with BMO and TD sounding the alarm on red-hot conditions.
“We’ve long been defenders of the Canadian housing market against the rabid bears, but activity in Vancouver at least is making that case a lot tougher to make,” BMO Capital Markets senior economist Robert Kavcic said in a note to clients.
Canada Mortgage and Housing Corp. said the seasonally adjusted annual pace for housing starts in February increased to 212,594 units, up from 165,071 in January.
Economists had expected an annual pace of 180,000, according to Thomson Reuters.
“While housing continues to surpass our expectations over and over again, conditions in Toronto and Vancouver continue to look increasingly frothy,” TD economist Diana Petramala said in a note to clients.
The February increase came as multiple-unit urban starts increased by 46.0 per cent to 138,774 units, while single-detached urban starts increased by 6.1 per cent to 61,457 units.
Rural starts were estimated at a seasonally adjusted annual rate of 12,363.
Regionally, the pace of urban starts in February increased in British Columbia, Ontario, Quebec, Atlantic Canada while they decreased in the Prairies.