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Canada Business News and Press Releases
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(I-Canada-News.Com, April 17, 2013 ) Vancouver, BC -- There are new signs that the cooling in the Canadian housing market is coming, but analysts
say that fears of a possible crash are not yet realized. Instead, it appears the descent will be a
gradual and less traumatic one than some had initially feared.
Canada Mortgage and Housing Corporation had reported that the pace of housing starts had
crept up in February in contrast to the number of single dwellings that were started within urban
markets.
Stars within March were up slightly higher than in February, but down 13.6% from 2012.
Meanwhile, Statistics Canada released a report on the building permits allowed that showed
future building intentions fell by 7.2% when it came to residential construction in February.
Each of the totals is not a great sign for Canadians, and in fact suggests that the housing
market will be a drag on the growth during the first quarter of 2013. It is also likely to affect the
near term as starts and sales come off higher levels of previous years.
Still, analysts are noting that the slow descent from the recent heights is not going to be as
traumatic as warriors might fear. Some state the downturn is actually what is needed after
inflated prices were becoming a possible bubble scenario.
"The slowdown suggests we are not crashing, people are not panicking, especially condo
builders," said Benjamin Tal, a senior economist with CIBC World Markets.
"All the indicators we are seeing as of today, in the resale market and in the housing start
market, suggest this is a market that is slowing softly. We should be in the neighborhood of
170,000 to 180,000 in housing starts and we should be getting there."
Tal stated that demographics show that builders ought to be erecting nearly 180,000 new unites
a year in order to retain a balanced approach to the market. At 184,000, that is still too high up
and Tal has predicted that starts ought eventually slow to nearly 170,000 to manage the excess.
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