UPDATE 2-Mortgage rules take bite out of Canada building permits

Thu Feb 7, 2013 11:22am EST
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* December -11.2 percent, November -14.5 percent

* Largest two-month decline in at least 24 years

* Measures to tighten mortgage market appear to be biting

* Seasonal adjustment can lead to large swings

By Randall Palmer

OTTAWA, Feb 7 (Reuters) - Tighter Canadian mortgage rules appear to have put a serious damper on the housing market, especially on the heated condominium sector, judging by Statistics Canada data released on Thursday.

The value of Canadian building permits fell 11.2 percent in December after a 14.5 percent decline in November. That was the biggest two-month drop fall since the data series started in 1989, and left the value of building permits 16.2 percent lower than a year earlier.

The median forecast in a Reuters survey of analysts was for a 5.0 percent rise in the value of building permits in December.

The government set new mortgage rules and guidelines in June to cool what it had worried was becoming a housing bubble.   Continued...