Reuters | June 6, 2011

Building permits posted an unexpected 21-percent decline in April. BNN speaks with David Madani of Capital Economics about the data – and his belief that the Canadian housing market is set for a 25 percent pullback in prices.


The value of building permits issued in Canada in April unexpectedly plummeted 21.1 percent from March on weakness in the powerful province of Ontario, Statistics Canada data indicated on Monday.

Analysts in a Reuters poll had forecast a 6.0-percent decline from the near four-year high recorded in March. Statscan revised March's increase to 16.8 percent from an initial 17.2 percent.
April's month-on-month fall was the largest since the 23.7-percent drop recorded in January 2006.
In the residential sector, permits fell 12.6 percent in April on lower intentions in the multifamily component in Ontario. In the nonresidential sector the value of permits dropped 33.2 percent on lower construction intentions for institutional buildings in Ontario.
The total value of permits fell in seven provinces with Ontario—which accounted for over a third of all permits issued in April—posting by far the largest decline of 41.9 percent.
Compared with April 2010, total building permits declined 19.7 percent, with residential permits down 7.8 percent and nonresidential permits down 35.2 percent.