Housing stars came in at a seasonally adjusted annual rate of 160,577 units in January. That was a 18.5 per cent decline from the previous month and well below the consensus expectation of 195,000 new homes.
The drop was centred in urban areas, whereas rural starts rose 15.6 per cent.
Within urban dwellings, the decline was steepest in the condo market, where the rate of construction of new units dropped nearly 29 per cent. Single-family homes were down 11.2 per cent.
The slowdown was concentrated in Ontario, where the seasonally adjusted annual rate of new home construction plunged nearly 44 per cent. Quebec also registered considerable weakness, with starts down over 29 per cent.
What the analysts are saying:
January numbers continue a downward trend that’s been evident since August 2012, wrote RBC’s Laura Cooper.
The drop is hardly surprising, according to TD’s Diana Petramala. The pace of home building is now more in line with the rate of household formation.
The residential construction sector, which was an engine of economic growth in 2012, will likely be a drag in 2013, predicted CIBC’s Emanuella Enenajor.