Scotiabank chief executive officer Rick Waugh says he expects the Canadian housing market will have a “soft landing” rather than face a major downturn this year.
The head of Canada’s most international bank told the bank’s annual meeting that delinquency rates with its clients are “slightly elevated,” but appear to be under control.
Waugh says he doesn’t anticipate the bank will endure any significant losses from unpaid mortgages.
Canada’s housing market is expected to soften this year as fewer people buy homes and construction of new homes starts to slow.
A report from Scotiabank last month said that the slowdown was part of the market getting back into balance.
Lower housing prices tend to cause a larger correction in home prices in certain sectors like condominiums in major cities.
Separately, Canada Mortgage and Housing Corp. said Tuesday the pace of housing starts crept up slightly in March, despite a drop in the number of single dwellings begun in some urban markets.
The agency estimates there were 12,273 actual starts in March, which extrapolated out over 12 months gives a seasonally adjusted annual rate of 184,028, just over the 183,207 February figure.
It says the annual rate of starts in urban markets slipped 2.7 per cent in March to 157,217 units, as the level of activity in multiple-unit dwellings such as condos and apartments remained steady but starts of single urban dwellings fell.
There was a 6.6-per-cent decline in single urban starts to 60,558 units while multiple urban starts remained relatively unchanged at 96,659 units in March.
Urban starts decreased 15.7 per cent in Ontario on a seasonally adjusted annual rate and were down 13.5 per cent in Quebec.
However, urban starts increased in 27.1 per cent Atlantic Canada, were 13.8 per cent higher on the Prairies and 13.1 per cent higher in British Columbia.
In another report, Statistics Canada said municipalities issued building permits worth $6– billion in February, up 1.7 per cent from January.The agency says higher construction intentions in the non-residential sector in eight provinces more than offset a decline in the residential sector.
Despite the February advance, the total value of building permits has been trending downwards since late 2012.
Permits for residential construction fell 7.2 per cent to $3.6-billion.
The value of permits in the non-residential sector increased 18.9 per cent to $2.4-billion, with increases in every province except New Brunswick and Nova Scotia.
All three segments of the non-industrial sector – commercial, institutional and industrial – recorded increases.