For a second month in a row, housing starts remained well below the 200K threshold, and were at the lowest level in almost seven years. Pent-up demand that fuelled home construction since 2002 is now satisfied. In particular, previous activity in 2008 was spurred by condo starts in Toronto following strong pre-construction sales in the two previous years. This sector accounted for a significant portion of the housing starts decline over the last two months. In light of the recent weakness in existing home sales, I am inclined to believe that a further reduction in home starts is warranted. Fortunately, based on these numbers, it does not look as though Canada will experience a severe downturn to that experienced by our American counterparts.

Mounir R. El-Ayari, CIM, FCSI, C.h. P. Strategic Wealth
Investment Advisor
Associate Portfolio Manager
e-mail: mounir.el-ayari@nbf.ca