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Canadian Housing Starts, Building Permits Plunge

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Canadian Housing Starts, Building Permits Plunge

Canadian housing starts plunged in March, while building permits declined at a double digit pace in February, offering signs the housing market will continue to stabilize in the months ahead.

Housing starts eased to 156,823 units in March, down from the revised 190,639 pace in February, the Canadian Mortgage and Housing Corporation reported today in Ottawa. Economists forecast a pace of 191,000.

“In March, the trend in housing starts declined below 190,000 units for the first time in six months, reflecting a decrease in multiple unit starts,” said CHMC chief economist Mathieu Laberge. “Lower starts activity over the remainder of the year compared to 2013 is anticipated as builders continue to adjust activity in order to manage inventory levels.”

Building permits plunged 11.6 percent in February, after rising 8.1 percent at the beginning of the year, Statistics Canada reported today. Building permits dropped nearly five times more than expected, as planned construction projects for family dwellings fell at the sharpest monthly pace since the recession.

Permits for residential buildings declined 21 percent, a sign the overheated housing market was cooling. The value of residential permits (CAD $3.6 billion) was the lowest since February 2013, government data showed.

The reports should come as no surprise to Bank of Canada policymakers, who forecast a soft landing in the housing market. The decline in housing activity should also ease concerns that households may pile on more debt to buy homes.

The Canadian dollar was trading higher following the news. The loonie was up more than 0.3 percent to 0.9146 US.

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