Canada's housing market is a mess.
A huge surge in immigration combined with a jump in mortgage rates created both a supply and affordability crisis. Unfortunately, home builders aren't going to come to the rescue.
The latest quarterly survey from the Canadian Home Builders’ Association showed builder sentiment falling to 24.6 from 33.6 for single family homes. That's the lowest in the three-year history of the survey.
Last year, 64% of builders built fewer homes and 30% cancelled projects. For the year ahead, 41% of builders expected to have the same number of starts and 36% say fewer.
The country now finds itself in a trap as Canadians can't afford to buy houses in Canada and increasingly can't afford to rent either. Meanwhile, home builders aren't building.
I will be watching the spring housing market (which really gets going about mid-Feb) very closely as falling home prices (or not) are a major risk for the Canadian dollar this year.
