A slowdown in Canada's real estate market may be closer than many brokers think, with housing starts falling more than expected for July and as a result of declining condo construction.
Construction of new homes dropped 6.1 percent from June to a seasonally adjusted 208,500 units, according to CMHC. That falls short of the forecasted 213,000 unit most economists had anticipated.
The construction slowdown is only the latest report confirming key markets across the country have begun to cool. It also suggests that condo developers have also taken heed of dropping demand, curtailing projects -- including those sizable presale numbers.
Tight mortgage rules are being blamed for halted developments, as potential buyers put off purchases in anticipation of falling prices.
That hasn't yet happened in any substantive way, except in Vancouver.
But that is coming, according to Scotiabank. It released a report Wednesday, arguing the average national home price will fall by more than 10 per cent in the next two or three years.
The problem for brokers is that the actual number of sales is also expected to stay flat over that period.