Canada Mortgage and Housing Corp. reports that 2002 was the strongest year for homebuilding in 13 years, despite a slide in the number of starts in December.

“2002 ended on a high note, posting the highest level of yearly starts since 1989, thanks to low mortgage rates, growing employment and increasing incomes,” said David Weingarden, senior economist at CMHC’s Market Analysis Centre. “Total housing starts for 2002 are an estimated 204,857, representing a growth rate of 25.9%, compared to 2001, the highest annual growth rate since 1983.”

The seasonally adjusted annual rate of housing starts in Canada in December was 198,500, 6.7% lower than November’s revised rate of 212,900 units. Urban single starts rose 0.7% to 105,400 units from 104,700 units while urban multiple starts fell 17.9% to an annual rate of 69,200 units from 84,300 in November. Rural starts in December were estimated at an annual rate of 23,900 units.

Estimated actual urban housing starts for 2002 are 25.9% higher than for 2001 (179,082 units compared with 142,280 units). The single-detached market increased 31.7% while multiples increased 18.7%.

“Canada’s housing market is bound to lose some steam in the months ahead, but starts should still come in at a healthy 185,000 units for 2002 as a whole — still well above the long-term demographic trend of about 165,000 units,” predicts TD Bank.

RBC Financial Group economists agree that homebuilding activity could soften a bit further over the next few months, as November residential construction building permits dropped 7.8% from October. “However, steady interest rates this winter and spring combined with 2002’s strong job growth and income gains are helping to keep demand strong and should convince builders to continue to meet that demand with rising supply.”