Housing starts dipped in 2005 from the year before, but it was still an excellent year for the market, a spokesman for Canada Mortgage and Housing Corp. said Tuesday.

Starts for 2005 were estimated at 223,900 units, a decrease of 4.1 per cent, compared to 2004, said Bob Dugan, chief economist at CMHC's market analysis centre.

Still, he said, last year's figures were signs of a bustling market, thanks to low mortgage rates, healthy labour markets and steady income growth.

Starts are expected to ease again in 2006.

"Starts will continue to ease to 207,200 units this year due to a slight rise in mortgage rates and more balanced conditions in the existing home market," Dugan said. "Still, 2006 will be the fifth consecutive year in which housing starts exceed the 200,000 unit threshold."

On a monthly basis, the seasonally adjusted annual rate of housing starts for December was 227,700 units, up slightly from 225,000 units in November.

November slowdown in housing price increases

Statistics Canada reported Tuesday that growth in housing prices cooled slightly between October and November.

The federal agency said its new housing price index rose 0.5 per cent in November, down slightly from October's increase of 0.7 per cent. On a 12-month basis, prices for November were up 5.5 per cent compared to October's one-year increase of 5.4 per cent.

Statistics Canada said that of the 21 metropolitan areas surveyed, 12 posted monthly gains. Calgary led the way for the third consecutive month with an increase of 3.5 pe cent.

Price increases were mainly due to higher material costs, including drywall, flooring, lumber, and rising labour costs, Statistics Canada said, adding that higher lot values were also a factor.