Canada's seasonally adjusted rate of housing starts slipped to 189,200 in July, the Canada Mortgage and Housing Corporation said Tuesday.

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Canadian housing starts fell 1.6 per cent in July. ((CBC))

The CMHC also said it had increased its estimate of housing starts in June from 189,300 to 192,300, meaning the month-to-month change in July was a drop of 1.6 per cent.

The total of starts was ahead of market expectations for 185,000, but still marked the third consecutive month of declines and the lowest level of homebuilding activity seen since the start of the year.

Single-family residence building in cities fell 11.3 per cent, to 67,900, while multiple starts — on buildings such as apartments — increased by 13.4 per cent to 101,400.

Urban starts fell the most — 14.8 per cent — in British Columbia, but were also down 2.6 per cent in Ontario and 0.4 per cent in Quebec. They increased 37.7 per cent in the Atlantic region and 14.4 per cent on the Prairies.

Part of global trend

Also Tuesday, a report suggested the housing recovery globally has cooled, after a strong performance in the first three months of 2010, and Canada has been among those most affected.

The report, from Scotia Economics, suggested demand and prices have softened as global growth moderates, financial markets remain volatile and job creation continues to be sluggish.

"The recent slowdown has been most dramatic in Canada," said Adrienne Warren, senior economist at Scotia Economics.

"Average home prices in [the spring] were up just 6.8 per cent year-over-year, compared with 16.6 per cent year-over-year in (the first three months of 2010).

"Sales, while still at a high level, have trended steadily lower alongside reduced affordability and exhausted pent-up demand," she said.

The report also suggested sellers of resale homes have consistently commanded greater price increases from buyers over the past decade than have new home builders.

Between 2000 and the first half of 2010, it said, the average cost of a new home increased by just over 50 per cent. Over the same period, the average price of a resale home more than doubled.

It suggested the reasons for that include a shortage of resale listing relative to demand, a boom in renovations, and rising inner city land values.