The seasonally adjusted annual rate of housing starts slipped in December to 234,400 from 242,600 in November, Canada Mortgage and Housing Corp. said today.

CHMC said new construction finished 2004 on a strong note, however, sales of existing homes through MLS have been trending lower since March 2004.

It added that the level of activity in the housing market will begin to slow in 2005. Housing starts will decrease 9.8% to 210,200 units in 2005. Sales of existing homes will also fall. Nevertheless, CMHC forecasts that 2005 will be the second most active year on record for MLS sales.

“New home construction posted a 17-year high in 2004 with an estimated 233,000 starts representing 6.7% growth over 2003,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre. “The home building industry responded to strong demand for housing which resulted from low mortgage rates and tight labour markets.”

Residential construction activity ended 2004 with December housing starts in Canada’s urban centres decreasing 3.8% to a seasonally adjusted annual rate of 205,900 units.

Urban single detached starts inched higher by 0.9% to102,200 units in December, while urban multiple starts declined 8.1% to 103,700.

The estimated number of seasonally adjusted annualized starts in Canada’s rural areas was 28,500 units.

For the year 2004, actual urban starts increased 6.5% compared with the same period last year. Single starts rose 3.6% and multiple starts were up 9.7%.