New home construction in the Inspiration Community project by developers Tribute Communities in Richmond Hill Nov 10, 2010.The Globe and Mail
Canadian housing starts declined in January from December but were above expectations, with a slowdown in the multiple unit segment accounting for most of the weakness, Canada Mortgage and Housing Corp (CMHC)said on Wednesday.
The seasonally adjusted annualized rate of housing starts was 197,900 units, compared with 199,900 units a month earlier. The December figure was revised down slightly from 200,200 units previously.
The number of starts was above the consensus expectation of analysts, who had called for 194,000 starts.
Canada's hot housing market has put policymakers on the alert as rising prices and heavy borrowing by buyers at record-low rates raised fears of a housing bubble.
The Bank of Canada has suggested some markets may be overvalued, and says it is closely monitoring the situation along with the finance ministry and regulators.
Data released by Statistics Canada on Tuesday showed the value of building permits taken out by contractors in December soared to a 4-1/2 year high thanks to a hot condo market in Ontario.
But most analysts are betting on a soft landing rather than a U.S.-style crash in housing this year.
Tiff Macklem, the No. 2 at the central bank, noted on Tuesday that there has been some slowing in household credit growth, although he repeated concerns that some borrowers were spending more than they can earn.
The CMHC report showed the seasonally adjusted annual rate of urban starts fell by 2.8 percent to 176.600 units.
Multiple-unit urban starts, which include condominiums, eked out a 0.4 percent gain to 111,700 units.