The total value of building permits issued by Canadian municipalities fell 4.1% in December to $6.5 billion, following a 6.6% decrease in November. Economists were forecasting a 1.5% gain.
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Toronto, Canada (PRWEB) February 13, 2014
Canadalend.com, the leading low-cost private mortgage solution provider in Canada, weighs in on recent Canada building permit numbers and the outlook for the Canadian housing market in 2014.
Statistics Canada recently revealed that the number of Canadian building permits fell in December for a second straight month, as multiple-unit housing projects, including condominiums and apartments, dropped to the lowest level in nine months. (Source: “Building permits, December 2013,” Statistics Canada web site, February 5, 2014; http://www.statcan.gc.ca/daily-quotidien/140205/dq140205a-eng.htm.)
“The total value of building permits issued by Canadian municipalities fell 4.1% in December to $6.5 billion, following a 6.6% decrease in November. Economists were forecasting a 1.5% gain,” says Bob Aggarwal, president of Canadalend.com. “The unexpected decline was driven by multi-family dwelling, which fell 21.9% to a nine-month low of $1.47 billion; most of the declines came in Alberta, British Columbia, and Ontario. The lower building permit numbers also underscore a cooling in the Canadian housing market.”
The day after announcing disappointing Canadian building permits, Canada’s federal housing agency, the Canada Mortgage and Housing Corporation (CMHC) raised its forecast for housing starts and prices in 2014. It also said Canada’s improving economy will help lift sales and construction higher in 2015, though construction’s levels will balance out and sales and prices will tick slowly higher. (Source: Hopkins, A., “CMHC: Canadian housing starts and prices to stabilize in 2014 as demand slows,” Financial Post web site, February 6, 2014; http://business.financialpost.com/2014/02/06/canada-cmhc-starts-prices/.)
“The Canadian real estate market avoided the financial crisis that rocked the U.S. housing market. In fact, Canadian real estate experienced a post-recession boom and recovered more quickly than its peer nations,” Aggarwal adds. “However, the housing market started to cool in 2012, after the government tightened mortgage rules. But it didn’t cool for long, as demand sent prices higher in 2013 and they continue to be robust.” he adds.
Even though the CMHC is forecasting reduced housing starts and moderate price increases over the next two years, as the industry adjusts to rising interest rates and demand from first-time home buyers slows, 2014 is starting out on a strong note. In Toronto, the average selling price for a home was up more than nine percent year-over-year at $526,528, while the price for a detached home was up 12.1%. In Vancouver, the average selling price for a home increased 3.2% to $606,800, with the price for a detached home also increasing 3.2%. (Source: “House prices still rising in Toronto, Vancouver,” CBC web site, February 5, 2014; http://www.cbc.ca/news/business/house-prices-still-rising-in-toronto-vancouver-1.2524167.)
Aggarwal explains that while Bank of Canada governor Stephen Poloz expects the Canadian housing market to experience a “soft landing,” it will most likely depend on where the potential home buyer lives, with markets like Toronto, Vancouver, Montreal, and Ottawa continuing to drive the national average higher. Housing prices might be on the rise, but with mortgage rates still near historic lows, the average first-time home buyer can still get onto the property ladder in their desired location.
“Whether a potential home buyer is just curious about what kind of mortgage they qualify for or they want to lock in a loan at near-record-low interest rates, they should contact their local independent, licensed Canadalend.com agent,” he concludes.
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent, licensed professionals helping Canadians coast-to-coast. Canadalend.com provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and financing concerns. To learn more about Canadalend.com, visit the web site at http://www.Canadalend.com.