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By Andrea Hopkins
OTTAWA Dec 8 Canada's housing market showed
some signs of softening in November as new construction starts
fell, but separate data showed prices rose in October and
permits for future building jumped, suggesting the market could
have strength in reserve.
Housing starts fell 4.3 percent to 183,989 units in November
from a month earlier as construction of multiple-unit buildings
in Ontario dropped sharply, offsetting strong growth in British
Columbia, the federal housing agency said.
The decline in starts was sharper than analysts had expected
but a separate report showed the value of building permits
jumped 8.7 percent in October, suggesting housing starts could
bounce back in the coming months.
New home prices also continued to rise in October as the
red-hot Toronto market offset cooling elsewhere, extending the
long boom in Canadian house prices even as analysts brace for a
slowdown after government moves to rein in mortgage lending.
"Residential activity remains a highly regional story in
Canada. You know the short version of it by now - strength in
Toronto and Vancouver, but weakness in Alberta," BMO Capital
Markets Senior Economist Robert Kavcic said in a research note.
Canada's housing boom has been slowing unevenly in recent
years. The oil slump has dragged down housing sales and prices
in the energy heartland province of Alberta, and Vancouver
slowed sharply after the government introduced a 15 percent tax
on foreign buyers in August.
But Toronto, the nation's largest city, has continued to
soar despite repeated moves by the federal government and
regulators to tighten mortgage lending rules to protect
borrowers and banks from risky debt.
The report from the Canada Mortgage and Housing Corp showed
housing starts softening after a strong 2015 and early 2016.
Construction of multiple units, typically condos, dropped 7.7
percent in November, while single-unit starts were essentially
Separate reports by Statistics Canada showed building
permits surged unexpectedly in October, mainly due to plans for
increased construction in Alberta ahead of changes to the
province's building code. The 8.7 percent jump in permits was
well above economists' forecast for a decline of 0.7 percent.
Permits rose in every province except Quebec, with Alberta
up 40.4 percent. Overall, residential building permits climbed
7.7 percent while non-residential buildings jumped 10.7 percent.
In the same month, new home prices rose 0.4 percent, topping
economists' forecasts for a gain of 0.2 percent. Overall, prices
were up in 13 of the survey's 21 markets.
(Additional reporting by Leah Schnurr; Editing by Meredith