A report to be released today says many of Canada’s “economists and real estate associations are being overly optimistic” about the state of the housing market.
Canada tightened mortgage requirements in the summer and there are signs the market is cracking.
Canada Mortgage and Housing Corp. is forecasting housing starts to be at 213,700 this year and then fall to 193,600 in 2013. Mr. Dunning forecasts that they will fall further, to 170,000, in 2014.
As I’ve said before, this has the potential to be the major CAD story in 2013 but probably not until the second half. Even when house prices begin to fall, the FX market can be slow to adjust, often waiting until it shows up in GDP or employment numbers.
