Total housing starts in the Calgary census metropolitan area fell by a staggering 90 per cent in March compared with a year ago, according to data released today by Canada Mortgage and Housing Corp.

The CMHC said housing starts last month were 297 units. They were 3,068 units in March 2008.

Through one quarter of this year, total housing starts have reached 746 units, about 4,000 units lower than year-to-date production in 2008 — or a decline of 84 per cent.

“Last year in March, multi-family starts set a record due to a surge in highrise condominium construction,” said Lai Sing Louie, senior market analyst in Calgary for the CMHC. “Many large multi-family projects started last year are still under construction and these will need to be completed and absorbed to allow activity to expand again.”

Multi-family starts, which include semi-detached, row, and apartments were 126 units in March compared with 2,652 units started in March 2008, down by 95.2 per cent. To the end of March, there have been a total of 187 multi-family starts, down 95 per cent from the same period in 2008.

Meanwhile, there were 171 single-detached starts in March, down 59 per cent from the 416 units started in March 2008. At the end of the first quarter, there have been a total of 559 single-detached starts, down 48 per cent compared with the same period last year.

Housing starts across Alberta’s seven largest centres totalled 605 units in March compared to 4,031 units a year earlier, a drop of 85 per cent.

At the national level, the CMHC said the seasonally-adjusted annual rate of housing starts increased to 154,700 units in March from 136,100 units in February.

“Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre. “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”

The seasonally-adjusted annual rate of urban starts increased 17 per cent to 127,900 units in March. Urban multiple starts increased 28.3 per cent to 81,500 units, while urban single starts moved up by 1.3 per cent to 46,400 units in March.

The CMHC said new home construction is now at a more sustainable level after having been exceptionally strong over the past seven years, exceeding 200,000 units per year across the country.

On the surface, the CMHC report suggests that new housing starts activity picked up aggressively in March after six consecutive monthly declines, said Millan Mulraine, economics strategist with TD Securities.

“However, in the grand scheme of things, the key economic fundamental factors continue to point to further weakness in Canadian housing sector activity, and as such we believe that this surprising pickup in construction activity is likely to be a one-month wonder, and expect activity to soften in the coming months. Moreover, despite the rise in starts in March, the housing sector is likely to remain a drag on Canadian economic activity in Q1,” he said.

There are at least three reasons not to get too excited by the bounce in housing starts activity, said Douglas Porter, deputy chief economist with BMO Capital Markets Economics. First, almost all of the gain was in the volatile multiple unit category (28.3 per cent), while urban single-family starts rose just 1.3 per cent. Second, home-building reports around this time of year can be as much a weather report as an economic report, and March was generally on the mild side and third, the level of residential building permits sagged to just 124,000 units in February, suggesting activity is likely to fade further.

Porter said March’s level of starts is also down 35 per cent from a year ago.

“The housing sector is still trying to find a bottom, and with prices in retreat in most major cities, we wouldn’t look for a lasting rebound in homebuilding until at least 2010. Starts are expected to average 145,000 units this year, and this report does nothing to alter that view,” he said.