The Canadian construction industry scaled back its plans in January after an extraordinarily ambitious December, with the value of building permits in January falling by 12.3%, according to Statistics Canada data released on Wednesday.
The drop wiped out December's 10.5% advance, which had taken building permits to a seasonally adjusted 4-1/2-year high. The median forecast in a Reuters survey of analysts was for only a 4.0% decline.
Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have voiced concern about how heated Canada's housing sector has become, particularly in condos.
The value of permits in the housing sector fell by 6.6% after three consecutive monthly gains. The biggest drop was in multi-family dwellings, which fell 12.4% after a 30.8% surge in December.
One of the hottest markets is Toronto, where building permits fell 6.0% after December's 27.5% spurt. Aside from the December peak, the January level for Toronto was still the highest since March 2011.
The non-residential sector fell 23.1% after eking out a 0.3% gain in December, with the commercial, institutional and industrial components all falling broadly.
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