New construction in Canada has fallen for the sixth consecutive month, and some analysts are expecting the slowdown to continue to the end of the year. The Canada Mortgage and Housing Corporation (CMHC) released its figures for February, with 134,600 starts on a seasonally adjusted basis, down from the 153,500 units in January. That is well below the expected rate of 145,000 starts for the month.
New construction has been over 200,000 homes in each of the past eight years in Canada, so the drop is a major one. The peak was reached in September, 2007 and the February figure is a fall of some 50 percent from then. Fortunately, contractors have reacted quickly to the declining sales and there isn’t nearly the glut of unsold homes that there is in the US.
Overall, sales for existing homes are down significantly as well, as much as 50 percent from just a year ago in some cities. Bob Dugan, chief economist for CMHC noted that “’Originally the decrease in sales in the existing homes market was pretty well isolated in Western Canada, but since in October we have seen it spread to Ontario and Quebec. We are in buyers’ market territory.”
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