Building intentions for new condos plunged in August in a sign that the record boom in high-rise residential towers in several major markets – notably Toronto – may have begun to fade.
Statistics Canada said Tuesday building permits for “multi-family dwellings” fell nearly 30 per cent in August, led by Ontario. British Columbia, home to one of Canada’s other booming markets in Vancouver, was a “distant second,” StatsCan said.
“Ontario’s decrease was mainly the result of lower construction intentions for multi-family dwellings as well as institutional buildings,” StatsCan said.
StatsCan singled out a slowdown in the province’s biggest centre. “Lower intentions for multi-family dwellings drove the decline in Toronto.”
The decline was well in excess of what economists were predicting, with the consensus call pegged at a decline of 6.5 per cent.
‘Massive’ decline
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CIBC called the August decline “massive” noting the dive in condo building intentions drove overall residential intentions down 16 per cent in the month.
Decreases for multi-unit dwelling were reported in six provinces in all, while they increased in Alberta and Saskatchewan – the country’s best performing economies this year.
“In Calgary, multi-family dwellings were behind the advance,” StatsCan said.
MORE: Is fresh condo boom underway in Toronto, Vancouver?
The sharp drop partially reversed an even larger gain in building permits for condos in July, which notched a massive 42.8 per cent jump nationally. July was the third month in a row of big gains in permit activity.
“Keep in mind that permits are extremely volatile, and each of the prior three months saw double-digit percentage increases,” economists at Bank of Montreal noted.
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