November housing starts fell to 172,000 units, representing a 21.6 per cent decline in year-over-year comparisons, the Canada Mortgage and Housing Corporation said Monday.
The federal agency attributed the decline in part to slumping demand in the condo market.
"Note that at the beginning of the new millennium, Canada posted strong housing start levels given a pent-up demand that existed then," said Bob Dugan.
"Over the last few years, this excess demand gradually decreased and our forecast for 2008 and 2009 reflects this new reality with housing starts, more aligned with long run demographic demand."
Seasonally adjusted urban multiple starts fell 29.1 per cent to 81,700 units from 115,300 in October. Urban single starts slowed nine per cent to 63,100 units.
Collapse unlikely in Canada: RBC report
Meanwhile, RBC Economics on Monday released a report suggesting that while Canada's housing market is slowing, a U.S.-style downturn is unlikely to be mirrored here given that the sub-prime business is marginal and banks are continuing to lend.
"Many of the factors that triggered the collapse in the United States are either absent or of much lower significance on this side of the border," said Robert Hogue, a senior economist with RBC.
The report noted that market corrections are occurring in British Columbia, Alberta and Saskatchewan as the economy continues to weaken. Conversely, prices continue to rise in St. John's, Saint John, N.B., and Halifax, the report said.
According to RBC's Affordability index for a detached bungalow - which measures the proportion of pre-tax income needed for homeownership - Vancouver led the country with 74.8 per cent, followed by Toronto at 53.3 per cent, Calgary at 47.3 per cent, Ottawa at 43.3 per cent and Montreal at 40.4 per cent.