OTTAWA — Canada Mortgage and Housing Corp. says housing starts in December came in at a seasonally adjusted annual rate of 172,965 homes, down from 212,028 in November, a decline of more than 18 per cent, mainly because of fewer multiple-unit projects.
According to Bloomberg, that's the steepest drop in three years. Economists had expected an annual pace of 200,000, according to Thomson Reuters.
The slowdown in the annual pace of new home starts came as the rate of urban starts fell 19.1 per cent in December to 159,007 units. Multiple urban starts dropped 27.0 per cent to 101,264, while single-detached urban starts held steady at 57,743.
"Before getting too worked up, note that a big portion of the drop reflects a pullback in Toronto, which saw a very large number of units break ground during the fall months," BMO economist Robert Kavcic wrote.
"Such is the nature of housing starts (i.e., volatility) in a market increasingly dominated by condos."
Condo starts in Toronto fell to their lowest level since September, 2014, but "this is hardly bad news, and even a relief for policymakers after starts were running too hot for comfort earlier in the year," Kavcic wrote.
Alberta saw housing starts plummet by 39 per cent in the month, for the slowest pace of starts in four years. Vancouver saw its strongest year for housing starts last year since 1993, Kavcic noted.
The pace of urban starts fell in the Prairies, Ontario, and Atlantic Canada, but increased in British Columbia and Quebec.
Rural starts were estimated at a seasonally adjusted annual rate of 13,958.
The six-month moving average of housing starts was 203,502 units in December compared with 208,204 in November.
"Although we’re ending the year on a soft note, housing was one area that surprised to the upside in 2015, with the 194,000 average building pace up around 10,000 from the prior year," CIBC economist Nick Exarhos wrote.
"Residential investment is still likely to provide a modest catalyst to growth in the next few quarters as new projects are seen through to completion."
— The Huffington Post Canada, with files from The Canadian Press