OTTAWA - Canadian housing starts fell in July from June, as construction of multiple units - typically condos - fell 13.3 per cent after an unexpectedly large gain in June, data from the national housing agency showed on Tuesday.

The report from the Canadian Mortgage and Housing Corp showed the seasonally adjusted annualized rate of housing starts declined to 198,395 in July, down from a revised 218,326 in June. Economists had forecast 195,000 starts in July.

The expected fallback in housing starts was broadly based, according to the report, with groundbreaking on new detached homes down by a more modest 1.8 per cent, and starts falling in all regions of Canada except the Prairies.

Hot housing markets in Canada's two largest cities, Toronto and Vancouver, have sparked some fears of a housing bubble, even as other markets cool amid a slump in commodity prices that has weighed on the nation's economic growth.

"Housing prices might be a bubble in some Canadian cities, but July data show that starts and construction rest on a firmer foundation tied to population growth and demand," CIBC Capital Markets chief economist Avery Shenfeld said in a research note.

The six-month trend of housing starts edged up to 201,936 units in July, continuing a strong pace of homebuilding that has been one of the few bright spots in Canada's economic growth in recent years.

For the first seven months of the year, starts are running at a 198,000 unit monthly pace, according to BMO Capital Markets economist Robert Kavcic, who called the clip "firm but not out of whack with overall demographic demand."

Kavcic noted that the strength in housing starts in British Columbia so far this year have come mostly in Vancouver's condo market, despite July's decline, with the number of condos under contruction at a record high.

Some analysts expect home sales to slow in Vancouver as the a new tax on foreign buyers comes into effect.