Is Canada’s housing market overheating?

fireNewly-released data from the CMHC shows that housing starts rose across the country throughout September and October, with a total of 198,282 new housing starts built. This represents a 1.2 per cent increase over last year’s total of 195,829. This total significantly exceeded analysts’ prior prediction of 190,800 new builds.

Despite the positive nature of this release, the increase has many wondering whether or not the Canadian housing market will soon begin to overheat. But the CMHC is optimistic, and believes that the market will not be overheating anytime soon.

“The trend in total housing starts has gained momentum since July, which is in line with expectations that new construction would strengthen over the second half of 2013,” explains Mathieu Laberge, deputy chief economist for the CMHC.

Canada’s housing market experiencing a sharp drop in 2012 after the federal government announced they would be tightening the mortgage rules.  But the market reversed its trend in 2013, which further fuelled the fear that the market was heading towards a bubble situation.

However, the CMHC remains optimistic about the performance of the market in the future. Their experts maintain that the market has achieved the soft landing it has needed, and that it will continue to grow at a steady pace.

“Housing starts remain on target with our projected total for 2013, which is expected to range between 179,300 and 190,600 units,” Laberge said.

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