Canadian housing starts plunged in January as both single and multiple starts fell, particularly in Ontario, Canada Mortgage and Housing Corp said on Friday in a report that showed the housing market was weakening even faster than expected.
The seasonally adjusted annualized rate of housing starts was 160,577 units in January, down from 197,118 in December and the lowest monthly rate since July 2009 when the housing market was sideswiped by the global financial crisis.
The December figure was revised down from the 197,976 units reported previously.
The number of starts in January was well below the forecasts of analysts in a Reuters poll, who had expected 195,000 starts.
Mark Chandler, head of Canadian fixed income and currency strategy at RBC, said the monthly series tends to be volatile.
"It was almost all concentrated in the multiples category. So as a result of that, we'll wait and see on that front. It is consistent with the slowing you saw in the existing home sale market, though," Chandler said.
The CMHC said it was preferable to focus on the six-month moving average of housing starts, which were trending at 203,208 units in January.
"The trend in total housing starts has been moderating since September 2012 and in existing home sales since May 2012. Trends in the two market segments typically follow a similar pattern with the new home market lagging behind the existing home market by a few months," CMHC Deputy Chief Economist Mathieu Laberge said in a statement.
"The current trend is also in line with CMHC's housing market outlook, which calls for moderation in housing starts activity in 2013."
Urban starts decreased by 22.3 percent in January to a seasonally adjusted annual rate of 138,134 units, the report showed. Single urban starts fell 11.2 percent to 59,318 units and multiple urban starts decreased by 28.9 percent to 78,816 units.
By region, Ontario and Quebec had the most dramatic drop. Urban starts fell 43.9 percent in Ontario, 29.6 percent in Quebec and 5.9 percent in the Prairies, while urban starts increased 59.4 percent in Atlantic Canada and 7.7 percent in British Columbia.