{"id":11922,"date":"2019-03-19T11:11:13","date_gmt":"2019-03-19T18:11:13","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=11922"},"modified":"2019-03-11T12:32:50","modified_gmt":"2019-03-11T19:32:50","slug":"mortgage-rules-affordability-slow-down-the-homebuilding-in-canada","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/03\/mortgage-rules-affordability-slow-down-the-homebuilding-in-canada\/","title":{"rendered":"Mortgage Rules &#038; Affordability Slow Down the Homebuilding in Canada"},"content":{"rendered":"<p style=\"text-align: justify;\">Canadians who are looking to buy homes aren\u2019t the only ones feeling the pinch from mortgage rules the federal government brought in last year.<\/p>\n<p style=\"text-align: justify;\">The rate of homebuilding in the country took a surprising tumble in February, and it\u2019s related to mortgage stress testing, which raises requirements to qualify for a loan, says a leading economist.<\/p>\n<p style=\"text-align: justify;\">\u201cResidential construction, which remained firm through much of last year, has shown signs of slowing with the double whammy of tougher mortgage rules and poor affordability in major markets,\u201d writes BMO Chief Economist Douglas Porter in a response to preliminary housing start data from the Canada Mortgage and Housing Corporation.<\/p>\n<p style=\"text-align: justify;\">\u201cWhile February was a bad weather month, the more complex adjustments in the housing market have worked to slow residential construction,\u201d Porter continues.<\/p>\n<p style=\"text-align: justify;\">In February, housing starts, which are roughly measured when work begins on a home, contractors broke ground for 10,384, down 29 percent from that month last year. At an annualized rate \u2014 so if this pace continued \u2014 homebuilders would start construction on about 173,200 homes, down 16 percent compared to January\u2019s pace.<br \/>\n<a href=\"https:\/\/www.roryc.ca\/blog\/?attachment_id=11923\" rel=\"attachment wp-att-11923\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-11923\" src=\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/03\/built-288x216.jpg\" alt=\"\" width=\"611\" height=\"458\" srcset=\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/03\/built-288x216.jpg 288w, https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/03\/built.jpg 664w\" sizes=\"auto, (max-width: 611px) 100vw, 611px\" \/><\/a><br \/>\nThe slowdown was widespread. Nova Scotia was the only province in which housing starts increased.<\/p>\n<p style=\"text-align: justify;\">In Ontario, the most populous and active homebuilding province, housing starts are around normal levels despite recent declines.<\/p>\n<p style=\"text-align: justify;\">\u201cThe 12-month moving average now hovers near 75k annualized \u2014 not too far from the trend of around 80k per year \u2014 but there is clearly a downward shift,\u201d Porter explains.<\/p>\n<p style=\"text-align: justify;\">Meantime, in a separate note, Robert Kavcic, Porter\u2019s colleague and a senior economist, notes residential investment, including new construction, home sales, and renos, has dropped 7.5 percent from a year before.<\/p>\n<p style=\"text-align: justify;\">Such a decline is nothing to sneeze at. \u201cHistorically, declines of this magnitude have usually correlated with a broader recession,\u201d he says.<\/p>\n<p style=\"text-align: justify;\">But don\u2019t expect a crash in residential construction this year. Porter suggests employment and population growth are too strong for that to happen.<\/p>\n<p style=\"text-align: justify;\">\u201cBut, with fastest population increase since the \u201990s and a strong labour market, starts are expected to still average around 200k this year &#8230;.. ie, builders likely won\u2019t be packing away their hammers anytime soon,\u201d Porter concludes.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/03\/homes-built-canada-mortgage-rules-affordability-blame.html\" target=\"_blank\" rel=\"noopener noreferrer\">Fewer New Homes are Being Built in Canada Now. Mortgage Rules &amp; Affordability are to Blame<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canadians who are looking to buy homes aren\u2019t the only ones feeling the pinch from mortgage rules the federal government brought in last year. The rate of homebuilding in the &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/03\/mortgage-rules-affordability-slow-down-the-homebuilding-in-canada\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-11922","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mortgage Rules &amp; Affordability Slow Down the Homebuilding in Canada &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/www.roryc.ca\/blog\/2019\/03\/mortgage-rules-affordability-slow-down-the-homebuilding-in-canada\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Mortgage Rules &amp; Affordability Slow Down the Homebuilding in Canada &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Canadians who are looking to buy homes aren\u2019t the only ones feeling the pinch from mortgage rules the federal government brought in last year. 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