Ottawa new building permits fell 43% in Nov

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Canada's building sector takes double-digit hit in November

Last Updated: Friday, January 9, 2009 | 10:57 AM ET

CBC News


The number of new building permits fell by almost 12 per cent in November as Canada's residential construction potential hits its lowest level in four years.
Statistics Canada said Friday that contractors took out $4.8 billion worth of building permits in November, a drop of 11.8 per cent from October.
November was the third month out of four in which the indicator for construction activity decreased and was almost 23 per cent lower than the same month in 2007.
"The value of non-residential permits fell 15.2 per cent to $2.1 billion, the second consecutive monthly decrease. This drop occurred mainly as a result of declines in Quebec, Ontario and British Columbia," Canada's statistical agency said.
New-home permits dropped by a slightly lower amount — nine per cent — but hit their lowest level, $2.7 billion, since January 2005.
Statistics Canada said the value of single-family home permits shrank eight per cent, the fourth consecutive month in which this figure dropped.
November's decline in building permits(%)
St. John's –16.2
Ottawa –43.4
Toronto –15.7
Vancouver –22.1

Source: Statistics Canada
Within Canada's urban areas, Ottawa, Toronto and Vancouver were among those cities that experienced the largest drop in building permits in November.
Fewer homes getting built

Companies wanting to conserve cash rather than invest in new structures, along with slumping prospects for homeowners, hammered the residential and non-residential ends of the building sector.
As a result, fewer homes and big structures are getting built across Canada.
Canada Mortgage and Housing Corp. said housing starts — the point at which shovels go into the ground — were basically flat in January, compared with December, once adjusted for seasonal variations.
If you grossed up January's starts for 12 months, there were 177,300 new homes begun in the month, a marginal decline from 178,000 one month earlier.
Preliminary numbers also showed that Canadian builders started seven per cent fewer homes in 2008 than they did in 2007.
Infrastructure hope

If Ottawa brings in a stimulus package when the government tables its new budget later in January, accelerated infrastructure spending could be an important component.
While unlikely to affect the residential component of the building trades, the new money could assist the flagging commercial, institutional and industrial construction sector.
That would be true especially if the government embarks on a program to expand universities, hospitals and other public institutions.
Such a strategy would get more people working in Canada's construction sector, which shed 44,000 in December, compared with November.

 

[SweetBunny]

Depends on how you see the situation. If the builders keep on building new homes, the house price will certainly drop as they have to sell these news houses once they are built --- but now with much fewer new houses to put on the market, the house price will at least not drop significantly. I believe this is a conservative approach taken by builders, as said in this article, to conserve cash and wait for the economy to turn to the better side.

 

[yycivang]

Depends on how you see the situation. If the builders keep on building new homes, the house price will certainly drop as they have to sell these news houses once they are built --- but now with much fewer new houses to put on the market, the house price will at least not drop significantly. I believe this is a conservative approach taken by builders, as said in this article, to conserve cash and wait for the economy to turn to the better side.

conserving cash is a good approach. It is little too late in this case to change the inevitable. the new house inventory is now the highest in almost two decades, at the same as the time the last bubble bust. It was reported in Globe and Mail last month.

 

[yycivang]

conserving cash is a good approach. It is little too late in this case to change the inevitable. the new house inventory is now the highest in almost two decades, at the same as the time the last bubble bust. It was reported in Globe and Mail last month.

a picture is worth a thousand words.