Prices seen falling as building declines
The latest numbers on the Canadian housing market are mixed, but still they indicate that the decade-long real estate boom has seen its peak.
In July, the value of building permits tumbled 11.3 per cent compared with June, according to Statistics Canada. This means construction plans are cooling three times faster than economists had anticipated. It also means the rise in housing starts - which climbed 5.1 per cent in August from July - cannot be sustained.
One of the leading economists in Canada, Adrienne Warren of Scotia Economics, warned that the risk of prices dipping has increased.
'There is little doubt that current trends are unsustainable,' she said. 'Affordability is becoming increasingly stretched for many would-be buyers after almost a decade of rising home prices.'
Even in red-hot western Canadian regions such as Alberta and British Columbia markets are no longer hot but just warm.
