bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Canada's booming housing market appears  to be slowing down at last as a result of rising prices and a slight increase in mortgage rates.

But the Central Mortgage and Housing Corporation (CMHC), the federal government agency that oversees the industry, said  residential construction would remain at a surprisingly strong level for the rest of this year and  next year.

The building of new houses  is expected to  decrease  by about 4.2 per cent over last year, but that is hardly surprising because  last year marked the highest level of new home construction in 17 years.  A further decline next year is also expected.

'Increased competition from the existing home market and rising mortgage carrying costs due to strong house price growth and modest increases in mortgage rates will slow the pace of new home construction in 2006,' Bob Dugan, chief economist at the CMHC, said.

After reaching record levels this year, the sale of existing homes will also slow   next year.

As sales and construction sag, house prices that rose by a hefty 10.2 per cent this year are expected to rise by a more manageable 4.9 per cent next year.

The recent increase in housing prices has shifted the housing market in central Canada towards condominiums and town houses and away from detached houses.

Although the Bank of Canada's trend-setting interest rate is watched closely for its effect on the housing market, Mr Dugan warned that the impact might be exaggerated.

Most mortgages are determined by the bond market; only about 30 per cent of all mortgages are tied to the variable rates that move with the bank's prime interest rate.

The recent increases in the world price of oil have ensured that the hottest housing market in the country is Alberta, Canada's oil patch, where building is at a record  high and  builders are turning customers away.

Mr Dugan said Alberta's booming economy would continue to attract workers from Ontario, with the result that pressure would  remain in the western province's housing market. However, he expected that even Alberta would slow  slightly next year.



Residential boom in Canada shows signs of cooling