The Canadian housing market is faring well, despite some numbers that may suggest otherwise.
In Alberta, housing starts are almost non-existent as renovation and restoration are the orders of the day. This trend will continue for a while until things are under control and then new-home starts will return. There's also been considerable uncertainty in Quebec due to a construction strike, again resulting in a slowdown in starts.
However, given that Canadian numbers in general are quite positive, this means that eight other provinces are performing at a level that counterbalances the two giants who may not be performing at peak levels just yet.
Canadian businesses are planning on increased hiring and employment, but have been slow off the mark this year. There are still domestic economic concerns, resulting in high part-time employment and a jobless rate still over seven per cent.
On a positive note, we seem to have better control over our personal finances. Growth in total household credit is running below historical averages and the ratio of household debt to disposable income is moving lower. With continuing current low interest rates, the debt-servicing burden remains very low.
Edmonton and Halifax have been leading the way in elevated building-permit activity this year, primarily in the multi-family sector. But permits also appear to be up slightly across Canada.
The ever-increasing condominium supply is creating temporary relief in the rental market. The national apartment vacancy rate sits at 2.7 per cent, with Calgary, Edmonton, St. John's, Toronto and Winnipeg well below the national average.
We continue to enjoy low inflation rates, well below the two-per-cent target called for earlier in the year. This will hopefully keep the pressure off the Bank of Canada to increase rates, which is good news for the new-home and renovation markets. New Bank of Canada Governor Stephen Poloz seems to have backed off a bit from a previous tightening of policy, preferring to keep rates unchanged while there is slack in the economy.
Given that the Canadian economy is not anticipated to reach full capacity until at least mid-2015, this translates into continued ideal conditions for the residential construction industry and market in Canada.
Mike Moore is president of the Manitoba Homebuilders' Association