Canadian housing starts slowed in October as the once-hot British Columbia market braked sharply, while separate data on Tuesday showed the value of building permits slipped in September, suggesting the country’s long property boom is cooling.
Groundbreaking on new homes fell to 192,928 units in October, roughly in line with expectations, from a revised seasonally adjusted annual rate of 219,363 units in September, the Canada Mortgage and Housing Corp said.
The slowdown in new construction was sharpest in British Columbia, where starts dropped 44.9 per cent. Vancouver, Canada’s most expensive housing market, has come off the boil since the August introduction of a tax on foreign buyers in that city.
Housing starts in Ontario, by contrast, rose 20.0 per cent in October, suggesting Canada’s largest city, Toronto, remains red-hot, the report from the federal housing agency showed.
A long housing boom in Canada sparked fears of a real estate bubble, and the government has moved multiple times to tighten mortgage and tax rules to prevent borrowers from taking on too much debt to get into the market.
“Residential construction activity remains a highly regional story in Canada. The new development in October was the falloff in Vancouver, which could be the first sign that builders are responding to much softer demand in that region,” BMO Capital Markets senior economist Robert Kavcic said in a research note.
