Some of the air seems to be leaving the high-flying Canadian housing market. December housing starts dipped to 189,672, and permits were down by 6.7 percent. New construction is expected to dip further in 2014 after falling last year. Canada’s housing market hit the affordability wall last year, just like many high-flying markets are currently doing here in the U.S. The stagnation of Canada’s housing market could be seen last year, and the condo boom in some of Canada’s larger cities including Toronto and Vancouver was a warning sign that things were getting overheated. It will be interesting to see how Canada absorbs all those new condos coming to the market in the next year or two. While real estate firms may be claiming that the housing market in Canada is healthy, many prospective home buyers probably have a completely different take on Canada’s high housing prices.
Deutsche Bank’s recent report on the most overvalued international housing markets suggests that affordability certainly isn’t a top priority in Canada’s housing policy.