Canadian housing starts in July 2009, at 132,000 units annualized, were near what they have averaged for the year as a whole so far (133,600 units annualized), according to Canada Mortgage and Housing Corporation (CMHC). They are likely to fluctuate around this figure from now to the end of the year. At least at this level, if indeed it is a floor, they are performing a lot better relatively speaking than U.S. housing starts. On a proportional basis, Canadian housing starts would have to drop to about 60,000 units annualized to plumb the same depths as U.S. housing starts in this recession.

Unsold Inventories

When looking to the future, a key factor to consider is unsold inventories. This is where the market is clearly segmenting in Canada. The unsold inventory of single-family units is starting to come into alignment with historical levels. It is now only too high by 59%. The unsold inventory of multiples, however, just keeps on climbing. It is now in excess by a good deal more than double. This is the market where developers have gone into bankruptcy and financing packages have disappeared or dried up. Listen to the radio or follow the homes sections in daily newspapers for high-profile projects that are holding distress sales to sell out units and help receivers rescue buyers and investors alike.

Regionally

Regionally, the only two provinces with increases in starts so far this year are in the Atlantic Region – Prince Edward Island (+9%) and Newfoundland and Labrador (+2%). Québec (-20%) and New Brunswick (-22%) are also doing relatively okay compared to the rest of the country. Homebuilding in the three western-most provinces − Saskatchewan (-61%), Alberta (-58%) and British Columbia (-68%) has sunk into a deep decline.