"The increase in real residential building permits suggest residential construction has room to run over the coming months".
-Krishen Rangasamy, National Bank Financial
Canadian building permits dropped unexpectedly in November, official figures revealed on Tuesday. According to Statistics Canada, the value of building permits issued in the reported month fell 0.1%, following the preceding month's upwardly revised gain of 10.5%, revised from the originally reported increase of 8.7%, while market analysts anticipated a rise of 2.4% in November. Lower construction intentions for both single- and multi-family dwellings were mostly responsible for the reported decrease. Data showed residential building permits declined 1.6% in the eleventh month of the year, while non-residential permits advanced 3.0% during the same period amid higher construction plans for institutional buildings.
Separately, Statistics Canada reported Canadian housing starts jumped 10.6% to a seasonally adjusted annual pace of 207,041 units in the last month of 2016, compared to November's upwardly revised 187,273 unit-pace. The increase caught markets by surprise, as they expected housing starts to climb at a rate of 195,000 units during December. Canadian home construction is widely expected to slow in the upcoming months due to the 15% foreign buyers' tax on Vancouver properties, which came into effect in August 2016, and new mortgages rules.
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