TORONTO (Reuters) - Canadian housing starts fell in November for both single- and multifamily homes, particularly in Ontario and British Columbia, Canada Mortgage and Housing Corp said on Monday in a report that adds to evidence of a slowdown.
The seasonally adjusted annualized rate of housing starts was 196,125 units in November, down from 203,487 in October and well below the high above 250,000 hit early in the year. It was the weakest reading since November, 2011.
The slowdown was sharper than expected, below the 201,200 forecast of analysts in a Reuters poll. The October figure was revised down from 204,107 units reported previously.
“As expected, housing starts remained below their recent trend and continued to fall for a third straight month,” Mathieu Laberge, deputy chief economist at CMHC, said in a statement.
“This decrease was mainly attributable to declines in single-detached and multi-unit housing construction in Ontario and British Columbia, resulting in part from a decline in the pace of pre-sales relative to that in late 2010 and early 2011,” he added.
Canada’s housing market has been slowing since the spring after years of red-hot growth that sparked debate about a bubble. The pace of new homebuilding as well as sales has dipped, but prices are still holding up in many markets, and economists are mostly predicting a gradual cooling rather than a U.S.-style housing market crash.
“Residential construction is acting as a drag on Canadian growth, but at this point, the landing in the sector still looks soft,” BMO Capital Markets Economist Robert Kavcic said in a research note.
“With national sales down about 10 percent since the spring high, and given that construction tends to lag demand, the surge in starts to above 250,000 in April is looking increasingly like a near-term high for Canadian residential construction.”
The seasonally adjusted annual rate of urban starts fell 4.0 percent to 174,323 units in November. Urban single starts declined 5.4 percent to 58,606 units, while urban multiple starts fell by 3.2 percent to 115,717 units.
Urban starts fell 14.3 percent in Ontario, 16.5 percent in British Columbia and 45.6 percent in Atlantic Canada, while rising 15.4 percent in Quebec and 16.1 percent in the prairies.
“The drop in starts in Atlantic Canada was primarily due to a decrease in multi-unit housing construction in Halifax, following higher than normal activity in October,” Laberge said.
Reporting by Andrea Hopkins; Editing by Dan Grebler