New home starts fell 11 percent in January to 153,500 units on an annualized basis, the fifth straight decline, Canada Mortgage and Housing Corp. said today, February 9th, from Ottawa. Economists anticipated the pace would slow to 165,000 units, according the median of 20 responses in a Bloomberg survey.
“Canada’s homebuilders are aggressively pulling in their horns on worries of a supply glut in a deteriorating economy,” Derek Holt, an economist at Scotia Capital in Toronto, wrote in a note to clients.
Potential buyers of new homes are being discouraged by job losses in the country’s first recession since 1992, which has also triggered a rising stock of existing homes that they can buy instead. Employers cut a record 129,000 workers in January, Statistics Canada reported Feb. 6.
Work on new single-family homes in cities fell 20 percent to 50,000 units, the lowest since February 1996. Condominiums fell 12 percent to 76,700.
New home construction declined in all five regions of the country in January, led by 30 percent drops in British Columbia and the western prairie provinces, the report said.
“Reduced sales and increased listings in the existing home market have led to reduced spillover demand in the new home market,” Canada Mortgage and Housing’s chief economist, said in the report.
Existing home sales will fall 17 percent this year, the CREA said in a separate report today, blaming waning consumer confidence.
Bankruptcies jumped 47 percent in December from a year earlier as more consumers struggled to pay their bills, the country’s bankruptcy superintendent reported on its Web site.
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Toronto real estate. FEBRUARY REAL ESTATE UPDATE
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