Scotia Capital senior economist Adrienne Warren takes a look at some recent residential real estate data from both Canada and the U.S. She says this morning that the crisis in the U.S. appears to moderating although she's not ready to call an end to the housing downturn there. And then she writes:
In contrast to the United States, there is still scant evidence of a significant supply overhang in Canada. The inventory of completed but
unsold new homes, while edging higher across most major markets remains relatively low from a historical perspective, both for singledetached and multi-family developments. In addition to the general loss of economic momentum nationwide, tighter lending guidelines and high material and labour costs have contributed to a more cautious approach among builders in recent years.The volume of homes for sale in Canada’s resale market has also been moving up, and combined with softer demand, has lifted the
national ratio of new listings to sales from an average of 1.6 in 2007 to 2.0 in June. This shift from the strong sellers market of recent
years to essentially balanced conditions points to a cooling off period in which home prices should rise in line with general inflation.
There are significant regional differences,however, with new-listings-to-sales ratios in several of Canada’s previously hottest markets, including Saskatoon, Calgary and Vancouver, now favouring home buyers, with greater inherent downside price risk.