Decline In Canadian Housing Starts

The national housing agency in Canada recently revealed from a data that the housing starts in the country decreased last month from June, as the erection of more units, especially condos which went down by 13.3 percent after a surprising gain in June. From the report that was shown by the Canadian Mortgage and Housing Corp, the timely change of the annualized rate of housing starts went down from 218,326 in the month of June to 198,395 in July. Economist has foreseen the starts figure to be 195,000 last month.

The anticipated decline in housing starts was caused due to the newly detached homes that declined down to 1.8 per cent based on the report, which caused the starts to fall down across Canada, leaving the Prairies out.  As other real estate markets in the country cool down in the middle of the price slump of commodities, Toronto and Vancouver’s housing market are afraid of another uprising housing bubble.

A chief economist for CIBC Capital Markets, Avery Shenfeld commented in a research note: “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.” The housing starts that have been constant for six months went up by 201,936 units last month, maintaining a tough pace of construction which has been one of the country’s economic backbone that aids its economic growth.

Based on what an economist – Robert Kaycic – at BMO Capital Markets said after calling the clip “firm but not out of whack with overall graphic demand.” The starts are at a pace of 198,000 units per month for the first seven months of the year. The area which seems to be doing well and contributing to the country’s economy is the Vancouver’s condo real estate market, even though there was a decrease in the housing starts in British Columbia last month. Analysts foresee a slowdown in the sale of homes in Vancouver due to the newly introduced tax on foreign buyers.