Housing starts in Red Deer were lower last month than in January 2010, according to numbers released Tuesday by Canada Mortgage and Housing Corp. However, construction activity so far this year has been stronger in the single-detached category.
Total starts in the city during January numbered 29, a 41 per cent decline from the 49 starts recorded a year earlier. But the year-over-year drop resulted entirely from a slowdown in multi-family projects, with two units started last month as compared with 27 a year earlier — a 93 per cent decline.
By contrast, there were 27 single-detached starts in Red Deer in January, a 23 per cent improvement over the 22 in the first month of 2010.
Alberta’s seven largest urban centres combined for 1,074 housing starts last month. That’s down 15.5 per cent from the 1,271 starts in January 2010.
Year-over-year starts for January were up 118 per cent in Lethbridge, with Grande Prairie 18 per cent higher and the Calgary metropolitan area one per cent better. The other four urban areas were down: the Regional Municipality of Wood Buffalo by 20 per cent, Edmonton by 37 per cent, Red Deer by 41 per cent and Medicine Hat by 73 per cent.
Nationally, CMHC estimated the number of housing starts in January, without seasonal adjustments, at 10,584. That’s down from 11,172 actual starts in January 2010 and places Canada on pace for 170,400 housing units this year — about 10 per cent fewer than in 2010.
The Bank of Canada began raising its key interest rate last summer, after keeping it at the lowest possible 0.25 per cent for more than a year in an effort to stimulate economic activity. The central bank’s key rate rose to one per cent in October, and is expected to go higher this year.
“We continue to expect a softening in housing starts in coming months as home prices moderate and the Bank of Canada resumes its tightening cycle by mid-year,” said Krishen Rangasamy, an economist at CIBC World Markets.
With files from The Canadian Press.