Canadian housing starts tumbled in October from a three-year high set the month before, led by a reversal of gains in multiple-unit projects that had fed concerns about overbuilding.
The pace of work on new homes dropped at the fastest pace in eight months, by 14.4 percent to 198,065 units at a seasonally adjusted pace, Canada Mortgage & Housing Corp. said from Ottawa Monday. Projects such as condominiums and apartments fell 22.4 percent to 122,187 units and single-family homes rose 1.3 percent to 59,255 units.
The decline follows a warning by Canada’s housing agency that builders needed to manage the supply they were putting into a market that only needs 190,000 spaces each year to meet the population’s growth. Even with the October decline, housing starts have risen from a pace of 178,954 units at the end of last year, boosted by steady job gains and the lowest mortgage rates in decades.
“We’re a bit in exaggerated territory,” said Jimmy Jean, a strategist in the fixed-income group at Desjardins Capital Markets in Montreal. “There could be some more moderation ahead given the year that we’ve had.”
The decline was close to the reading of the median estimate of 200,000 in a Bloomberg survey of economists with 16 responses.