Home builders heading south

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Some of Canada’s biggest construction companies are hedging their bets by developing projects in the US. With uncertainty over the domestic housing market, builders are picking up land in Texas, Florida and other parts of the US where prices have yet to recover from pre-crisis levels. Although there are mixed reports on the US housing market, it is expected to pick up and Canadian companies such as Mattamy and Brookfield believe they will be well placed to cash in on the uptick. Builders in the US appear more cautious about building on the low cost suburban land, but this is partly due to being less cash-rich than some of Canada’s firms; there are a lot of unsold new homes down south restricting cash flow. If Canada’s new home sales slow down significantly, those builders that have investments in the States are hoping that those projects will pick up the slack.

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