TORONTO (Reuters) - Canadian housing starts fell more than expected in August compared with July as both multiple and single-detached starts declined, data from the national housing agency showed on Thursday.
The seasonally adjusted annualized rate of housing starts fell to 182,703 units in August from a revised 194,663 in July. Economists had expected starts to fall to a 190,000-unit pace in August.
The decline in starts to a still healthy level left them more in line with what the trend in building permits data has suggested, Avery Shenfeld, chief economist at CIBC Capital Markets, said in a research note.
Starts of multiple urban buildings such as condominiums fell 7.3 percent to 111,378 units, while single-detached urban starts dropped 3.7 percent to 56,501 units.
“Housing starts declined in August, as construction of multi-unit dwellings slowed in most regions, led by lower activity in Alberta and Manitoba,” said Bob Dugan, chief economist at CMHC, in a news release.
The geographic split revealed that starts decreased in the Prairies, British Columbia, Ontario, and in Atlantic Canada, but increased in Quebec.
“Housing market activity levels remain elevated and this decline in starts is the market’s response to increasing levels of supply,” Dugan added.
Hot housing markets in Canada’s two largest cities, Toronto and Vancouver, have sparked some fears of a housing bubble, even as other markets cool amid a slump in commodity prices that has weighed on the country’s economic growth.
However, recent data has shown a slowdown in home sales in Vancouver. A new tax on foreign buyers was recently introduced in the city.
“An easing in housing starts in 2017/18 vs the annual average of 2016 will mean Canada needs an alternative source of growth,” said Shenfeld.
Editing by Chizu Nomiyama and Alan Crosby