A construction worker works on the ‘ICE Condominiums’ development site by Cadillac Fairview and Lanterra Developments in Toronto December 14, 2012.MARK BLINCH/Reuters
The value of building permits issued by municipalities in June totalled $6.6-billion, down 10.3 per cent from May, Statistics Canada said Wednesday.
The federal agency said it was the first decrease in six months, and came mainly from the non-residential sector in Quebec and the residential sector in Ontario.
CIBC economist Peter Buchanan noted economists had expected a 2.8-per-cent drop and said the move suggests "housing starts may begin to slow in coming months from levels which continue to appreciably outpace underlying family formation."
The total value of permits was down in 20 of the 34 cities included in the report with the biggest drops in Toronto where there was a decrease in multi-family dwellings and Montreal which say a drop in plans for commercial and industrial buildings.
Calgary saw the biggest increase in June, followed by Vancouver and Thunder Bay.
The overall decrease came amid increasing focus on the Canadian housing market, which has been cited by the Bank of Canada as the biggest domestic risk to the economy.
Canada Mortgage and Housing Corp. recently notified mortgage lenders that they will each be restricted to a maximum of $350-million of new guarantees this month under its National Housing Act Mortgage-Backed Securities (NHA MBS) program, a move that could make it more expensive for banks to obtain funds to lend to their customers.
Last summer, Finance Minister Jim Flaherty brought in tighter rules for mortgage lending in an attempt to head off an overheated housing market.
Nationally, residential permit values fell 12.9 per cent to $4-billion in June, accounting for most the drop. The decrease followed three consecutive monthly increases for the residential sector.
The value of home building permits was down in nine provinces, led by Ontario and followed by Quebec and Alberta. Only Saskatchewan and the Northwest Territories showed gains in June.
Building permits for multi-family dwellings fell 18.8 per cent to $1.8-billion nationally in June, while single-family homes fell 7.4 per cent.
Statistics Canada said municipalities authorized the construction of 17,656 new dwellings in June, down 12.2 per cent from May.
In the non-residential sector, the value of building permits fell 9.5 per cent to $1.4-billion with six provinces posting decreases, led by Quebec, Ontario and Saskatchewan.
British Columbia posted the biggest gain due to plans to build office buildings and service stations.