Developers started building fewer homes than expected in December, mostly because of a decline in multi-unit projects, CanadaB次元官网网址檚 housing agency said Thursday.

Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts came in at 197,329 in December, down from 204,320 in November.

Analysts on average had expected an annual rate of 210,000 for December, according to financial markets data firm Refinitiv.

Bob Dugan, CMHCB次元官网网址檚 chief economist, said multi-family starts in Toronto, Montreal and Ottawa were the main drags on starts, but stable activity in Vancouver and significant growth in Calgary helped offset those declines.

Starts in multi-unit dwellings in urban areas fell five per cent from November, including a 17 per cent decline in Ontario, while urban starts of single-detached homes edged up one per cent.

The six-month moving average of the overall monthly seasonally adjusted rate was 212,160 units in December, down from 219,921 in November.

B次元官网网址淗ousing starts lost a bit of steam toward the end of last year,B次元官网网址� said RBC senior economist Josh Nye in a note.

The annualized pace for the fourth quarter as a whole came in at 201,000, compared with 220,000 in the prior two quarters, he noted.

But Nye said starts should be in the middle of the range for the year ahead as the market rebounds, helped in part by CanadaB次元官网网址檚 fastest population growth rate since the early 1990s.

B次元官网网址淭hat would be consistent with a resurgent housing market B次元官网网址� which we see extending into this year B次元官网网址� and strong demographics.B次元官网网址�

CIBC senior economist Andrew Grantham said the slowing starts in the fourth quarter contributed to a deceleration in overall economic growth, but that starts should clock in slightly above the 200,000 mark this year.

B次元官网网址淲e expect that the combination of lower mortgage rates (compared to the start of last year) and solid population growth will support demand for housing in 2020,B次元官网网址� he said in a note.

TD economist Rishi Sondhi said the drop in multi-unit starts was likely from past declines in pre-construction condo sales. Sondhi said the effects of past pre-construction sales declines would continue to restrain homebuilding in key markets this year.

The Canadian Press

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