Canada Mortgage and Housing Corporation said on Saturday that the annual pace of housing starts in Canada fell by 22 percent in November as fewer multi-unit projects began.

The agency said the seasonally adjusted annual rate of housing starts in November was 212,624 units, down from 272,264 in October.

Canadian home sales also declined. This decrease came with a 23 percent drop in the annualized pace of starts in urban areas to 195,363 units, with the multi-unit urban start rate falling by 27 percent to 151,297. The number of single detached units in urban areas dropped by seven percent to 44,066 units.

Kevin Hughes, CMHC's Deputy Chief Economist, said in a statement: "The significant decline in the rate of housing starts in November, especially in multi-unit spaces, should not come as a big surprise and reflects the tougher economic conditions affecting construction timelines."

"As tougher borrowing conditions and labor shortages now show up in the start figures, we can expect to see a continued slowdown in start rates in the coming months."

The start rate in Montreal decreased by 30 percent, while both Toronto and Vancouver saw a 39 percent decline, driven by a significant drop in multi-unit starts.

The annual pace of rural starts for November was also estimated at 17,261.

The six-month moving average of the seasonally adjusted annual rate for housing starts in November was 257,777, an increase of 0.7 percent from 255,876 in October.

In the same context, Rishi Sundi, an economist at TD Bank, said the data aligns with the bank's view that housing starts will trend downward moving forward, as previous weakness in home sales flows into new supply.

Sundi wrote in a Saturday report: "However, we expect some bounce-back in December, in line with the rise in permit issuances in recent months."

He pointed out that government measures such as the removal of GST on purpose-built rentals along with population growth are likely to keep start levels elevated into 2024, even with the expected downward trend.