The value of home building permits in Canada fell close to 20 per cent in January, according to figures released Thursday, the worst showing in the residential sector since the global credit crunch began in late August.

Statistics Canada said residential contractors only took out $2.2-billion worth of permits to build new single and multi-unit residential dwellings. That amount — which is an early indicator of activity in the sector — represented a drop of 17.5 per cent, or approximately $400 million, compared with December 2008.

"Ontario accounted for most of the decline at the national level, although seven provinces reported a decrease. Saskatchewan, Nova Scotia and British Columbia were the only provinces showing increases," said Statistics Canada in a news release.

January's double-digit decline also was a precipitous drop in home building interest compared to the previous five months.

Residential building permits have declined since August when the worldwide financial crisis really accelerated, but only at an average of 6.3 per cent.

Worse still, you need to go back to July to find the last month in which builders actually increased the value of permit requests in Canada's residential sector.

Home owners in Canada and the United States have been less interested in buying new homes as the economy in both countries soured.

A report by CIBC Economics released earlier this week calculated that mortgage credit in Canada is now growing at about 50 per cent of the pace it did in the middle of 2008.

"There are clear signs that the household credit market is slowing at an accelerating pace," said CIBC economist Benjamin Tal in the study.

Overall drop

In overall terms, the value of new buildings permits, which also includes business and institutional construction, fell by 4.6 per cent in January across Canada.

But on the non-residential side, permit valuations rose by 12.3 per cent to $2.3 billion.

Interestingly, Ontario led the increase in January with non-residential building permits up 75 per cent to $1.2 billion. That showing represented the first increase since September when the province's business and institutional construction permits cracked the $1-billion level.

Because the value of a single building in this sector can run into the millions of dollars, however, permit swings in the business and institutional sector are common.