Canadian housing starts slipped 5.7% in April, in line with expectations.

“The slow down in overall starts and multiples construction in particular was to be expected because much of the surge in housing starts early in the year was due to runaway condominium construction in Ontario and particularly Toronto with further slow downs expected in that sector,” RBC Financial Groups said. RBC forecasts a steady slow down in housing construction trends with a total of 200,700 starts this year followed by 177,500 units in 2004.

BMO Nesbitt Burns Inc. said the Canadian home-building industry continues to provide support for growth in the broader economy. “While down from the heady levels seen earlier this year, the pullback has been concentrated in the volatile multiple-unit category, which soared in the first three months of the year,” BMO said. “In contrast, the more important single-unit sector has remained exceptionally strong, even managing to rise 3.5% last month.”

“Housing has simply been the strongest component of the Canadian economy for over a year, and a major reason Canada has been at the top of the G7 growth ladder. While the massive gains of last year are over, there is no sign yet of a significant softening in activity, as singles remain at buoyant levels,” BMO concludes.