Join 34,000+ Traders & Investors by getting our FREE weekly Sunday Cheat Sheet email. Get key market news and events before everyone else. Click Here to See if you Qualify.
Canadian housing starts witnessed a substantial 22% decline in November, falling to 212,624 units from a revised 272,264 units in October, according to data released by the Canadian Mortgage and Housing Corporation (CMHC). The figures, which missed estimates by a considerable margin, reflect the impact of higher borrowing costs on groundbreaking activities for both multiple-unit and single-family detached urban homes.
Economists polled by Reuters had anticipated a decrease to 257,100 units for November, indicating that the actual figures fell short of expectations. The monthly decline follows a broader trend in the housing market, with data from the Canadian Real Estate Association revealing a drop in home sales in November, signaling a cooling trend in the sector.
CMHC’s Deputy Chief Economist, Kevin Hughes, wasn’t too surprised by the numbers and offered insights into the situation, stating, “The notable drop in the rate of housing starts in November, particularly in the multi-unit space, should not come as a major surprise and reflects tighter economic conditions impacting construction timelines.”
Hughes further noted that the challenges of difficult borrowing conditions and labor shortages are now evident in the housing starts numbers, and anticipates continued slower start rates in the upcoming months.
The Bank of Canada’s decision to raise its key policy rate to a 22-year-high of 5% to address inflation has added to the headwinds facing the housing market. Most economists forecast that upcoming mortgage renewals at higher rates will further impact growth in the next year.
In response to the challenges, the Bank of Canada has called for policy changes to stimulate more housing construction and alleviate pressure on inflation caused by a shortage of shelter, especially during a period of record immigration.
Prime Minister Justin Trudeau’s government has identified housing as a top priority and has introduced measures to address the crisis. These include a plan to convert federal properties into new homes by March and identifying more public buildings for home conversion. However, the recent decline in new building starts underscores the complexity of the issue, and the government’s initiatives face the formidable task of addressing the housing crisis while navigating economic challenges.
CMHC projects that, if the current rates of new construction persist, the housing stock will reach close to 19 million units by 2030. However, the country needs to build an additional 3.5 million units by that time to restore affordability, highlighting the urgency of addressing the evolving dynamics in the Canadian housing market.
This Options Discord Chat is The Real Deal
While the internet is scoured with trading chat rooms, many of which even charge upwards of thousands of dollars to join, this smaller options trading discord chatroom is the real deal and actually providing valuable trade setups, education, and community without the noise and spam of the larger more expensive rooms. With a incredibly low-cost monthly fee, Options Trading Club (click here to see their reviews) requires an application to join ensuring that every member is dedicated and serious about taking their trading to the next level. If you are looking for a change in your trading strategies, then click here to apply for a membership.