Housing starts are up in Ottawa, and new condo apartments are driving the growth, the Canada Mortgage and Housing Corp. said Wednesday.

According to the organization, total housing starts in the Ottawa Census Metropolitan Area increased to 361 units compared to 351 in March 2008, for a year-over-year growth rate of 2.8 per cent.

The biggest reason for the growth last month was condominium apartment construction.


"As construction activity realigns with economic and demographic fundamentals, the current trend favouring higher-density dwellings will be the main driver of Ottawa's new home market in 2009," said CMHC senior market analyst Sandra Pérez Torres.

In the capital's downtown core, construction on two new condominium apartment buildings added 122 units — or 34 per cent — to the city's total.

Aside from downtown, the other area seeing the biggest growth was Cumberland, with a mix of single-detached homes and townhouses.

Gloucester and the downtown core registered 45 and 33 per cent growth respectively from 2008, a large majority being apartments and townhouses.

Last year's popular suburban markets of Goulbourn, Kanata and Nepean declined this year, as first-time buyers were more cautious about buying new single-detached homes.

During the first quarter of 2009, the overall trend in Ottawa's new home market remained favourable toward sub-markets closer to the core with heavier shares of higher-density construction projects, CMHC said.

While the year-to-date starts is still 22 per cent below the record set in 2008, the present pace of construction remains healthy and consistent with CMHC's forecast, Pérez Torres said.

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