New home building is slowing – Reported CMHC. In September 2012 the number of starts was slightly above 220,000 units. This number is still well above 2010 number and there is no reason to worry about housing starts.
As resale falls so does starts.
Resale homes are creating less attraction for home buyers due to many reasons. One of the main reason is the expectation of a housing correction.
Builders are closely monitoring the situation and taking necessary steps to make sure minimal exposure to any downturn. As a result the housing starts slipped.
Since the drop is only region specific – some analysts were calling it a “Still Hot Homebuilding Market”
The Outlook and Lookout:
Outlook is conflicting. Experts are not singing the same tune and they don’t seem to be confident enough to take a good guess. Chances of BoC raising overnight rate soon – is very remote according to many recent report. BMO predicts a late 2013 rate hike.
You may remember that in 2011 all the banks were predicting a 2012 raise – which never happened. Therefore when experts are unanimously agreeing on one issue then how do we know that this time will be different than last time?
Canadian Currency is the next big problem to watch for. Once the interest rate starts to go down it will probably lose its steam. For all of us – a solid plan is required to move forward through the hurdles.