The Canadian Press

Scotiabank chief executive officer Rick Waugh says he expects the Canadian housing market will have a “soft landing” rather than face a major downturn this year.

The head of Canada’s most international bank told the bank’s annual meeting that delinquency rates with its clients are “slightly elevated,” but appear to be under control.

Waugh says he doesn’t anticipate the bank will endure any significant losses from unpaid mortgages.

Comment: With default rates at or less than 1/3rd of 1%, I would expect so. Canadian mortgages default at a rate around 1/1,000th as they do in the US.

Canada’s housing market is expected to soften this year as fewer people buy homes and construction of new homes starts to slow.

A report from Scotiabank last month said that the slowdown was part of the market getting back into balance.

Comment: A slow down meaning less sales. We are already seeing that in Toronto, with annual sales down from highs in the mid-90,000 range to a more manageable 80-85,000. It does not mean prices are going to fall or that the markets will crash.

Lower housing prices tend to cause a larger correction in home prices in certain sectors like condominiums in major cities.

Comment: Except most major Canadian cities have seen prices rise in Q1 2013. Only Vancouver, Victoria and Saint John, N.B. had prices decline this quarter. Canada as a whole, negative cities included, saw house prices rise 2.2% and condos rise 1.2%. That is for the 1st 3 months of the year, a full quarter. So where are these lower house prices coming from? Toronto prices rose almost 4% in March alone.

Separately, Canada Mortgage and Housing Corp. said Tuesday the pace of housing starts crept up slightly in March, despite a drop in the number of single dwellings begun in some urban markets.

The agency estimates there were 12,273 actual starts in March, which extrapolated out over 12 months gives a seasonally adjusted annual rate of 184,028, just over the 183,207 February figure.

It says the annual rate of starts in urban markets slipped 2.7% in March to 157,217 units, as the level of activity in multiple-unit dwellings such as condos and apartments remained steady but starts of single urban dwellings fell.

Comment: Well, duh… who is building houses in cities anymore? It is all condo construction now.

There was a 6.6% decline in single urban starts to 60,558 units while multiple urban starts remained relatively unchanged at 96,659 units in March.

Urban starts decreased 15.7% in Ontario on a seasonally adjusted annual rate and were down 13.5% in Quebec.

However, urban starts increased in 27.1% Atlantic Canada, were 13.8% higher on the Prairies and 13.1% higher in British Columbia.

In another report, Statistics Canada said municipalities issued building permits worth $6– billion in February, up 1.7% from January. The agency says higher construction intentions in the non-residential sector in eight provinces more than offset a decline in the residential sector.

Despite the February advance, the total value of building permits has been trending downwards since late 2012.

Permits for residential construction fell 7.2% to $3.6-billion.

The value of permits in the non-residential sector increased 18.9% to $2.4-billion, with increases in every province except New Brunswick and Nova Scotia.

All three segments of the non-industrial sector – commercial, institutional and industrial – recorded increases.

Comment: Still not sure I understand what the soft landing here is. Sales volume drops a bit, from record highs down to the 5-10 year average. Prices keep rising. Building permit are up one month, down another, basically evening out. How is that even a landing? Sounds to me like things are rising or staying fairly level. Where is the drop? Where is the landing?

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Contact the Jeffrey Team for more information – 416-388-1960

Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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