OTTAWA (Reuters) - A hot Ontario condo market helped boost the value of Canadian building permits to a 4-1/2-year high in December and up 11.1 percent from November, Statistics Canada said on Tuesday.
The value of permits rose to a seasonally adjusted C$6.8 billion ($6.8 billion), the highest level since June 2007. The increase confounded analysts, who expected a 0.5 percent fall, on average, according to a Reuters survey.
The residential sector jumped 16.1 percent, led by a 28.9 percent leap in construction intentions for multi-family dwellings to C$1.9 billion, the highest level since December 2005.
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“The growth was due to major condominium and apartment building projects initiated in Ontario,” the agency said, adding that Toronto led the way.
The Bank of Canada has expressed concern about the housing market, particularly condos, saying there is the risk of an “overshoot” in some major cities.
Senior Deputy Governor Tiff Macklem said in Toronto on Tuesday that the central bank had noticed some slowing in household credit growth but remained concerned that some borrowers were spending more than they earn.
“This is something the Bank of Canada is very much looking at. We have expressed on numerous occasions our concerns about rising household indebtedness,” Macklem said in response to questions following a speech he gave.
“The simple fact is that consumers are consuming more than they’re earning. Household credit growth has been quite strong.”
The non-residential sector, which is more volatile because of the large value of individual projects, rose 2.8 percent. The commercial component jumped 41.0 percent, while industrial permits fell by 24.2 percent and institutional fell by 42.2 percent.
With additional reporting by Louise Egan and Jennifer Kwan in Toronto; Editing by Jeffrey Hodgson and Rob Wilson