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Housing sector slowdown continues in Canada

Canadian housing starts have plummeted, official data has revealed

The Canada Mortgage and Housing Corporation calculated a seasonally adjusted annualised rate of 196,125 unit starts in November.

This was down from a rate of 203,487 in October, marking a third consecutive month of decline in the sector.

Mathieu Laberge, deputy chief economist at CMHC, said: ‘Housing starts remained below their recent trend and continued to fall for a third straight month.

‘This decrease was mainly attributable to declines in single-detached and multi-unit housing construction in Ontario and British Columbia.’

Atlantic Canada saw a whopping 46 per cent drop in urban starts.

But a far bigger impact was felt from falls of 17 and 14 per cent respectively in the densely populated regions of British Columbia and Ontario.

Urban starts rose by 15 per cent in Quebec and 16 per cent in the Prairies.

Meanwhile house price across Canada also dropped in November from October in 10 of 11 markets, with only Calgary bucking the trend. According to theTeranet-National Bank Composite House Price Index, the cost of homes fell 0.4 per cent in November from a month earlier. It is the third consecutive monthly fall.

Royal Institution of Chartered Surveyors economist Himanshu Wani said housing starts across Canada were 9 per cent down on the same period last year.

He added: ‘High and rising home prices combined with consecutive rounds of tightening in mortgage lending regulations have eaten away at affordability levels, particularly for first time buyers. 

A sharp decline in prices nationally is unlikely

‘However, with the Canadian economy continuing to post modest if unspectacular growth, and moderately loose lending conditions, a sharp decline in prices nationally is unlikely.’

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