MORTGAGE Blog & ARTICLES
Housing Starts Picks Up Pace in September
The Canada Mortgage and Housing Corporation (CMHC) revealed the progress in housing starts. It stated that there have been 17, 343 housing starts in September. Thus, it makes 197, 343 annual figure which is seasonally adjusted. It has exceeded the economists’ expectations.
The Chief Economist of CHMC, Bob Dugan, stated that this uptick in housing starts pace has reflected better starts activity which is focused on multi-unit dwellings such as condominiums. In fact, this increase in trend began since April 2014 and there have been unexpected progress happened. Bob Dugan added that the elevated condominium units level that are under construction today reflects that the condo starts must be in lower trend on the succeeding months. According to the CMHC Chief Economist, this is what they perceive about the housing starts and it should be implemented properly.
In September, these seasonally adjusted urban starts annual rate has been reduced in Atlantic Canada and British Columbia. However, there is an increase in Ontario, the Prairies, and Quebec.
In August, CMHC stated that the housing starts’ annual pace slowed down from 199, 813 units to 192, 368 units. This pace failed to reach the analysts’ forecast of 195, 000 units. Nick Exarhos, the IBC economist reported that the Bank of Canada might have been searching for a “rotation” away from the consumer and the housing. However, lower rates pursue to support the residential investment.
These seasonally adjusted urban housing starts pace in regional aspect fell in Ontario and Atlantic Canada, while it increased in the Prairies and British Columbia. The home starts had remained unchanged in Quebec in August. The Bank of Canada closely watched the housing market. In its announcement about interest rate, central bank has noted that housing market was stronger compared to what was anticipated.
The improvement in the annual figure for the month of September calls for the attention of the aspects involved in housing starts to pursue on the most ideal approach of construction. Under the mortgage-insurance rules of Canada, mortgage insurance has been essential on loans to all home buyers who are making down payment of not more than 20 percent of the price.
The international bodies warned Canada to make certain changes in its mortgage-insurance program. In fact, in June 2014 Canada has been called by the Organization for Economic Cooperation and Development for reduction in its exposure on housing-market. The organization stated that Canada’s participation in such mortgage markets has been unusual in terms of international standards. At the same time it even exposes all taxpayers to great risks.
The Canadian Mortgage and Housing Corporation is the Government of Canada’s division established as a national housing agency. In the previous weeks, it was stated that there will be no bigger changes coming for the mortgage financing system of Canada. This has been confirmed by Joe Oliver, the Canadian Finance Minister.
The government of Canada has finally tightened its mortgage-financing rules for four times from 2008 up to 2012. However, CMHC implemented some changes like in premium increase and insurance product discontinuance for individuals who want to purchase second property.
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