Higher interest rates designed to fight inflation are also putting a damper on housing starts in this country.
When rates go up, buyers tend to move to the sidelines as it becomes tougher to qualify for a mortgage or waiting for prices to soften. It is much the same story for the companies that build houses. They too feel the urge to sit on the sidelines, waiting until the buyers start walking through the show home door.
The end result is that growth in housing stock is slowing at a time when our population is growing, which puts added stress on the marketplace and pushes prices higher.
The latest forecast from National Bank of Canada says Canadian starts will track 10 per cent behind last year’s pace. In Saskatchewan, they are projecting a more dramatic slow down: 3,300 new starts this year and 3,000 next year compared to 4,200 last year, which is a pull back of 20 per cent.
Even so, the bank says Saskatchewan and Alberta will post the strongest growth numbers among the provinces — both this year and next.