“As expected, housing starts remained below their recent trend and continued to fall for a third straight month,” explains Mathieu Laberge, Deputy Chief Economist with the CMHC. “This decrease was mainly attributable to declines in single-detached and multi-unit housing construction in Ontario and British Columbia, resulting in part from a decline in the pace of pre-sales relative to that in late 2010 and early 2011.”
Newly-released statistics from the CMHC show that the number of new urban builds fell 4 per cent to 174,323 units in November. Urban single starts also experienced a drop, declining by 5.4 per cent to 58,606 units, while multi-family developments fell to 115,717, units, a fall of 3.2 per cent.
With new residential builds decreasing across the country, many investors would be best suited to using a “wait-and-see” approach before putting up the capital for new purchases in some of the country’s major markets. But, as one expert notes, the news of the nationwide decline will likely not surprise many prospective buyers.
“It has not been made a secret that a cooling of the housing market nationwide would come around,” explains Paul Hatfield of Royal LePage Village in Pointe-Claire, QC. “Cities such as Toronto and Vancouver have been growing quickly for years, and the market is now catching up.”
Despite the decreases in some markets, all hope is not lost for investors.
“In other provinces new starts are up, so be careful on how information is digested,” Hatfield says. “I would suggest to investors to buy properties in the area they live in or know very well. We are seeing pockets of growth scattered all over the map, and an investor will want consult a real estate professional to confirm trends and expectations for a certain area.”