Bubble fears spread beyond housing bears as Vancouver condo building smashes records

OTTAWA – Demand for condominiums is soaring in big cities like Toronto and Vancouver, prompting some analysts to worry about a potential bubble. Simultaneously, crude-producing provinces like Alberta are in a slump.

Millionaire boomers decamp Vancouver pocketing housing windfalls as city becomes a ‘commodity’

The West Coast’s retirees are cashing out as an influx of foreign demand pushes up housing prices in Vancouver inflating real estate prices in B.C.’s once-sleepy retirement enclaves. Read on

“Housing starts are trending at a four-year lower in the Prairies, where low oil prices have weakened consumer confidence,” CMHC Chief Economist Bob Dugan said in a statement.

“Simultaneously, starts are trending in an eight-year high in Bc, as new and resale home inventories remain low,” he added.

Canadian housing starts jumped in February from January as hot Ontario and British Columbia markets outpaced the energy-producing West, in which a crude slump has hit confidence, the nation’s housing agency said .

A report from the Canadian Mortgage and Housing Corp showed the seasonally adjusted annualized rate of housing starts rose to 212,594 units in February from a downwardly revised 165,071 units in January. Forecasters had expected 180,000 starts.

The Liberal government last December attempted to cool the hotter areas of the marketplace, saying it would force individuals who are interested more expensive homes to supply a bigger down payment.

BMO Capital Markets economist Robert Kavcic said the national results masked the two-speed nature of the Canadian housing industry.

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“On one end from the spectrum, residential construction activity is within outright recession, during another, new construction has flared well above past highs,” he said inside a note to clients.

Kavcic noted that housing starts in Bc hit their highest level since 1990 while Vancouver recorded the most condominium starts on record.

“We’ve always been defenders from the Canadian housing market from the rabid bears, but activity in Vancouver at least is making that case a lot tougher to make,” he explained.

Separately, Canada’s national statistics agency Statscan said that the worth of Canadian building permits issued in January dropped by 9.8 per cent from December, the second sharp retreat in 3 months.

The fall exceeded the two.5 per cent decline forecast by analysts inside a Reuters poll.

A 21-per cent decrease in construction intentions for multi-family dwellings, concentrated in Ontario and British Columbia, was the key reason for the weaker performance in January. The overall value of permits issued in Alberta fell by 5.3 percent.

? Thomson Reuters 2016