Canadian housing starts fell to the lowest level in a year in May on a decline in Toronto apartment and town houses.

Housing starts fell 9.8 per cent to an annualized 195,613 units, from 216,775 in April, Canada Mortgage & Housing Corp. said Friday from Ottawa. Multiple-unit starts dropped 15 per cent to 124,957 units. Single-detached homes was the only segment to see a slight rise from April, with a 2 per cent gain to 70,655.

Housing has been a key driver of Canada’s economy for a decade as interest rates remain at historically low levels. In Vancouver and Toronto, the country’s biggest markets, prices have soared to record highs, prompting a series of regulations to cool the market. So far, the government has succeeded in slowing the rush, with both cities undergoing a drop in sales amid rising interest rates.

“In May, the national trend in housing starts declined following several months of stability,” Bob Dugan, CMHC’s chief economist, said in a statement. “This reflects a decline in multi-unit urban starts in May that leaves them close to their 10-year average following several months of historically elevated levels.”

In May, Ontario saw a drop of 22 per cent from April to 52,353 units, while starts in British Columbia saw a rise of 3 per cent to 40,892 units.

Toronto starts fell 13 percent, while in Vancouver they climbed 14 per cent.

--With assistance from Chris Middleton.