A surge in Canadian housing construction led to a quicker-than-expected increase in building permits in January, exactly one day after the central bank predicted the country's real estate market was headed for a soft landing, reports the Financial Post.

City-granted residential building permits saw an increase in value, rising 26.3 per cent to $4.60 billion ($4.18 billion), Statistics Canada said in a recent release. Vancouver was among Canada's leaders in terms of largest municipal gains, despite caution from experts that its market was most at risk from overbuilding.

Despite the positive outlook from this report, the Bank of Canada stood pat on its earlier forecase of a "soft landing" for the housing market. The central bank stated that the  household debt to income ratio was stabilizing around current record levels.

BoC governor Stephen Poloz kept the benchmark overnight interest rate at 1 per cent, citing balanced risks from stretched consumers and declining spending from businesses.

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