Daily Market Update

Building starts stagnate in December, single units outpace condos
The value of residential building permits was stagnant in December after a 2.5 per cent decline in November. The total value was $4.4 billion with Alberta, British Columbia and Quebec leading seven provincial gains. Ontario posted the largest decline after a 16.9 per cent increase in November. Saskatchewan and Manitoba also registered declines. Over the whole of 2014 there was a 5.1 per cent increase in total value of residential permits compared to the previous year. The value of single-family dwellings increased in all provinces with a national rise of eight per cent to $2.6 billion. In multi-family dwellings, there was a 9.5 per cent decline to $1.8 billion, mainly as a result of lower construction intentions in Ontario, followed by Saskatchewan and British Columbia. Gains were registered in five provinces, led by Alberta, and followed by New Brunswick and Quebec. In terms of national numbers there were 16,023 approvals in December, down 5.6 per cent from November. Multi-family dwellings were down by 11.9 per cent to 9,550, while single-family dwellings rose 5.5 per cent to 6,473.
Madani sees 30 per cent chance of recession, housing to fall
There could be a national recession in Canada within a year, according to David Madani of Capital Economics. In a note on Friday, Madani, who proudly proclaims that he is independent of the housing sector, opined that if business investment was hit by 10 per cent due to the lower oil prices it could have a ripple effect through the economy that may cause a recession. He noted that, although exports are looking stronger, they may not grow fast enough to offset falling oil revenue. Madani is also sticking to a four-year old prediction for a “day of reckoning” for the housing market; a scenario that has been dismissed by many in the industry. Phil Soper of Royal Le Page told the Financial Post that when the price rises since the original prediction are factored in there would have to be a 45 per cent drop for it to be accurate. Read the full story.


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