Canadian Housing Starts Slow Down in October

Canadian housing starts slowed in October as the once-hot British Columbia market braked sharply, while separate data on Tuesday showed the value of building permits slipped in September, suggesting the country’s long property boom is cooling.

Groundbreaking on new homes fell to 192,928 units in October, roughly in line with expectations, from a revised seasonally adjusted annual rate of 219,363 units in September, the Canada Mortgage and Housing Corp said.

The slowdown in new construction was sharpest in British Columbia, where starts dropped 44.9 per cent. Vancouver, Canada’s most expensive housing market, has come off the boil since the August introduction of a tax on foreign buyers in that city.

Housing starts in Ontario, by contrast, rose 20.0 per cent in October, suggesting Canada’s largest city, Toronto, remains red-hot, the report from the federal housing agency showed.

A long housing boom in Canada sparked fears of a real estate bubble, and the government has moved multiple times to tighten mortgage and tax rules to prevent borrowers from taking on too much debt to get into the market.

“Residential construction activity remains a highly regional story in Canada. The new development in October was the falloff in Vancouver, which could be the first sign that builders are responding to much softer demand in that region,” BMO Capital Markets senior economist Robert Kavcic said in a research note.

via Globe and Mail

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza