Housing projects decline while key markets report fewer transactions and smaller price increases
Entering 2007, Canada's housing market remains sturdy but signs of a cooling are obvious.
A decline in construction of condominiums and apartments pulled housing starts down 7.8 per cent last month, according to the Canada Mortgage and Housing Corp (CMHC).
Even key markets such as Calgary are showing slower housing sales and smaller price increases. During the fourth quarter last year, the average price on Canadian Real Estate Association (CREA) listings rose 9.2 per cent over the fourth quarter of 2005, the first increase of less than 10 per cent in 12 months.
'It appears as if Canada's housing market may be cooling after several years of robust growth, and starting to move towards more sustainable levels,' TD Securities economics strategist Jacqui Douglas said.
But since low mortgage rates, solid employment and income growth and a high level of consumer confidence gave the Canadian market a strong push throughout most of the year, 2006 ended up producing the second-highest level in housing starts in nearly two decades. Several cities across the country set sales records, among them Edmonton, Calgary and Ottawa.
In December, single-detached housing starts continued to trend downward and reached their lowest level of the year. All regions saw urban starts fall. And even in Alberta, home to Canada's most solid housing gains in recent times, residential construction experienced a decline.
