WRAPUP 1-Canada's housing market cools, trade gap narrows

Thu Nov 8, 2012 10:56am EST
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* Housing starts show market is cooling

* New home prices up for 18th month in a row

* Trade deficit narrows but export volumes sluggish

* Data points to slower economic growth, analysts say

OTTAWA, Nov 8 (Reuters) - Canadian housing starts fell more sharply than expected in October, according to data on Thursday that confirms a welcome slowing in the country's once-booming property market after the government repeatedly tightened mortgage rules.

Other data from Statistics Canada showed new home prices continued their modest rise in September while the trade deficit narrowed in that month on an oil-led export recovery.

Markets focused on the housing starts, which were down 8.9 percent from a year earlier as both single and multiple urban housing starts slumped, Canada Mortgage and Housing Corp (CMHC) said.

The seasonally-adjusted annualized rate of housing starts was 204,107 units in October, down from 223,995 in September and 18.9 percent below the cyclical peak reached in April.

"The October move was the most decisive one yet that a housing correction is under way," said Jonathan Basile, director of economics at Credit Suisse Canada.   Continued...