Canadian housing starts dropped dramatically in July. Housing starts fell 13.4% in the month to 151,800, the biggest monthly decline since March 1995.

“It comes as little surprise that Canadian housing starts cooled in July from their decade-high level in June. However, the size of the setback was somewhat disturbing, especially on the heels of yesterday’s twin downbeat reports (help-wanted ads and the Ivey PMI),” says BMO Nesbitt Burns Inc.

Despite the big slide, starts are still up over 5% year-to-date. Multiple-unit starts dropped 27.7% in July to 56,400, but these numbers are notoriously volatile.

“However,” BMO notes, “it was disappointing to see that the more stable singles component also took a tumble, losing 4.1% to 72,900 units in July. Both components are now below their averages over the past twelve months.”

On a regional basis, most of the big provinces suffered declines while housing activity in some of the smaller provinces remained upbeat. Ontario, Alberta and British Columbia. all saw drops. Quebec was the exception. Starts increased in la belle province, as they did in Nova Scotia and Prince Edward Island.

“The report is not as weak as the headline would suggest, since most of the decline was in multiples and the three-month trend is still solid. Even so, the underlying details are a bit softer than expected for July,” concludes BMO.