Published Friday, Feb. 08 2013, 8:51 AM EST

Last updated Friday, Feb. 08 2013, 1:43 PM EST

Canadian housing starts dropped sharply in January, coming in far below expectations, as home builders scale back, notably in Toronto’s condo market.

The number of starts sunk to 160,577 units during the month, down from 197,118 in December, Canada Mortgage and Housing Corp. said Friday.

In Toronto the figure came in at 16,800 units for January, compared to 49,800 in December.

“Home building, especially in multiunit starts, slowed in January after experiencing elevated levels of condominium apartment starts throughout 2012,” stated Shaun Hildebrand,...