Canada’s housing starts slowdown this year: CMHC

Posted on August 15, 2007
Filed Under Economy |

Canada’s housing starts slowdown to 220,000 this year, down 3.2 percent from last year, says the Canadian Mortgage and Housing Corporation (CMHC). This slowdown is partly due to higher prices, and rising mortgage costs. The agency also made a forecast of a drop to 207,200 next year as well.

“Despite high employment levels, income gains and low mortgage rates, housing starts will trend downwards in 2007,” said Bob Dugan, CMHC’s chief economist.

Though housing starts are expected to slowdown, builders and renovators will probably still continue to enjoy boom times in the industry. Why? Sales of existing homes are expected to hit a record 514,445 this year, up 6.5 percent from 2006 sales - according to the CMHC. The Conference Board also said that the booming western provinces help push the price of existing homes up 9.9 percent this year.

Renovations will most likely maintain the industry as Canadians are expected to keep spending money on home improvement projects. The federal housing agency said renovation spending will increase by 9.8 percent this year to $49.9 billion, and rise 6.8 percent next year to $53.3 billion.

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