UPDATE 3-Canada housing starts, home buying intentions rise

* Starts up 6.1 pct to 196,700 in February from January

* Economists expected 190,000 starts

* Canadian dollar rises to 6-week high after data

* Home buying intentions up from 2 years ago -RBC
(Adds RBC home ownership survey paragraphs 11-13)

By Ka Yan Ng

TORONTO, March 8 (BestGrowthStock) – Canadian housing starts rose a
better than expected 6.1 percent in February, reinforcing views
that the residential housing sector is a major force pulling
the economy out of recession.

Starts on new homes rose to a seasonally adjusted
annualized rate of 196,700 units in February from a downwardly
revised 185,400 units in January, Canada Mortgage and Housing
Corp said on Monday.

The number of starts in February surpassed the average
forecast of analysts for 190,000. The January figure was a
slight downward revision from the previously reported 186,300

“Overall, with the better than expected gain in residential
construction activity in Canada, it appears that the new homes
market is slowly coming back to life and may finally be
benefiting from the resurgence in overall housing market
activity,” said Ian Pollick, economics strategist at TD

The Canadian dollar rose to a six-week high of C$1.0257 to
the U.S. dollar, or 97.49 U.S. cents, following the housing
data. [ID:nN08169861]

It currency pared gains as details showed most of the
strength was due to a 19.1 percent surge in the volatile
multi-dwelling group.

That group, which includes high-rise condos, soared to
89,900 units in the month. The closely watched single-family
home component showed starts increased by a muted 0.5 percent
to 89,200 units. Still, single-family housing starts have
advanced for 10 straight months.

The mounting activity was in line with a strong rebound in
sales and prices in the broader housing market, spurred by
consumer confidence and low interest rates, after the market
hit bottom during the global financial crisis.

Analysts expect the market has the legs to advance further
this spring before the arrival of new mortgage rules in April
and changes to provincial sales tax regimes in British Columbia
and Ontario in July cool things down a bit. [ID:nN18184642]

“Housing starts continue to chase surging home sales, which
appear to have a green light through the spring,” said Robert
Kavcic, an economist at BMO Capital Markets. Along with the tax
and mortgage rule changes to come, he said he expected interest
rate hikes should temper demand.

Meantime, Canadian home-buying intentions for the next two
years has risen to 10 percent from 7 percent two years ago,
according to a home ownership survey by Royal Bank of Canada
(RY.TO: ).

Six in 10 Canadians also believe home prices will increase
this year, up from 25 percent in 2009, the survey found.
Similarly, 64 percent think mortgage rates will be higher over
the next year, up from 33 per cent a year ago.

The RBC study also found that 91 percent of homeowners
believe a home is a good investment, the highest level in 12
years, while 26 percent expect their home to be their primary
source of income when they retire.

Regionally, CMHC said Ontario led February’s gain in
housing starts, jumping 28.6 percent from January, followed by
a 14.3 percent advance in the Atlantic provinces. The Prairies
rose 10.8 percent, while British Columbia was up 8 percent.
Only Quebec saw a decline, with a 14.1 percent fall.

Rural starts were estimated at a seasonally adjusted annual
rate of 17,600 units in February.
Stock Market Research

(Reporting by Ka Yan Ng; editing by Rob Wilson)

UPDATE 3-Canada housing starts, home buying intentions rise