The US housing market isn’t the only one in a slump. Housing fell 9.2 percent in October, signaling a slowdown in the Canadian housing market.
According to Canada Mortgage and Housing Corporation (CMHC), the reported rate of housing starts was 167,900 units in October, down from 185,000 units in September. “Housing starts moved lower in October due to a decrease in urban single starts in all regions, with the exception of Atlantic Canada,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre in a statement. “Both single-detached and multiple starts decreased last month.”
Though housing start levels were expected to drop in October, the reported drop was larger than previously expected. The largest drops occurred in Ontario, the Prairie Region and British Columbia. Housing starts decreased by over 24.5 percent in Ontario alone. However, CMHC reports that housing starts increased in Atlantic Canada by 32.9 percent.
Are people fleeing urban areas for the rural good life of the Atlantic Provinces? It’s too soon to tell. A drop in housing starts is normal at this time of year. However, it has sent some speculating that Canada will experience a housing bubble on a scale less than the one experienced in the United States, but may significantly impact the Canadian economy. As is typical with human nature, a little bit of bad news can create expectations of impending devastation. Due to the stricter lending regulations of our neighbors to the north, where banks have not been handing out loans like candy, it’s doubtful the Canada will experience the real estate and foreclosure nightmare experienced in the United States since 2008.