EDMONTON — Edmonton housing starts maintained their momentum in January with the seventh-consecutive month of year-over-year increases.
The 577 starts in the Capital Region were 164 more than the same month last year, with single detached homes leading the way.
They accounted for 397 units, compared with 147 in the first month of 2009, and the eighth month in a row builders have started more single units than the previous year.
"We anticipate continued strength in new single detached production in the coming months as the local economic conditions improve," said Richard Goatcher, Canada Mortgage and Housing Corp.'s senior Edmonton market analyst.
Multiple dwelling starts decreased 32 per cent year-over-year following two months of improvement, with 180 semi-detached, townhouse and apartment starts, compared with 266 in January 2009.
Improved activity in semi-detached and townhouse construction was countered by a lower number of apartment starts, Goatcher said.
"Despite January's decline, CMHC looks for gradual improvements in multiple starts this year, compared with 2009 levels, as new-unit inventories head lower and rental-apartment vacancies also subside."
Housing starts in Alberta's seven largest centres totalled 1,271 units in January, up 52 per cent from the first month of 2009.
Increased activity in Calgary, Edmonton, Grande Prairie and Red Deer offset declines in Wood Buffalo, Lethbridge and Medicine Hat.
ATB Financial senior analyst Todd Hirsch noted starts in Alberta's urban areas slipped to 21,100 in January, down 17 per cent from December, and the second-consecutive month of loss.
The cold and snowy January may have had something to do with it, but the market may also be simply correcting from the surge recorded late last year, Hirsch said.
"With fewer new houses coming on to the market, residential prices (both new and existing home) may find a bit of support going into the spring."
The upward trend continued nationally, with starts rising 5.8 per cent to the highest level since October 2008, prompting some to warn that the new supply and future higher lending rates could trip up those gains in the second half of the year.
The seasonally adjusted rate of 186,300 units, up from 176,100 in December, beat the 180,000 units called for by analysts polled by Bloomberg.
"Supply is rapidly coming back into Canada's housing market compared to the extreme shortfalls of last spring through summer, and that should have one increasingly concerned about house prices later this year," Scotia Capital economists Derek Holt and Karen Cordes wrote in a morning note.
"More supply, compared to the extreme tightness over last summer and into the fall, combined with higher future variable-and fixed-rates will combine to cool housing demand and pose downside risks to house prices over the second half of 2010 and into 2011."
However, TD Securities economics strategist Millan Mulraine said the numbers were skewed somewhat by building related to the Vancouver Winter Olympics.
"With part of the uptick in starts likely to be coming as a result of temporary factors, namely the surge in Olympic-related housing in B.C., we believe that this report overstates the true strength of the recovery in residential construction and expect to see a modest pullback next month," Mulraine wrote ina note.
The numbers soared in British Columbia, where the seasonally adjusted annual rate of urban starts rose 19.8 per cent, while in Quebec rates rose 7.3 per cent. In Atlantic Canada rates rose by 2.3, and by 1.5 per cent in Ontario.
In the Prairie region, urban starts fell by 4.8 per cent