Housing market cooling not crashing

The week was full of indications that the Canadian housing boom has truly come to an end, but also replete with assurances from analysts that the slowing activity is healthy, and nothing like the crisis seizing the United States or parts of Europe.

Building permits for both residential and non-residential construction fell in February, by 4.5 per cent from a month earlier. The spin: The data series is often volatile; and most of February's drop can be traced to Alberta.

Housing starts sank about 12 per cent in April from March to an annualized, seasonally adjusted 213,900 new units. The declines were seen in most types of housing and most regions. The spin: The weakness comes after a strangely robust first quarter; and Canada is still well above the 200,000 mark seen as the benchmark for strength.

The Canadian Real Estate Association forecasts an 11.5-per-cent drop in home sales this year from last year, and another 4-per-cent decline in 2009. The spin: Home prices will continue to rise in every province; and Saskatchewan and Newfoundland and Labrador are still on fire.

All told, economists say Canada's housing market is cooling off, but gradually, and in a way that will help keep inflation low while not driving homeowners into bankruptcy. Heather Scoffield

HOUSE PRICES PROJECTED TO CONTINUE RISING

2007 (2007 Change) 2008 Change (2008 Forecast) 2009 Change (2009 Forecast)

Canada
$307,265 (11.0%) $323,500 (5.3%) $337,000 (4.2%)
British Columbia
$439,123 (12.3%) $485,900 (10.7%) $514,500 (5.9%)
Alberta
$356,235 (24.8%) $373,000 (4.7%) $383,300 (2.8%)
Saskatchewan
$174,405 (32.0%) $208,400 (19.5%) $226,200 (8.5%)
Manitoba
$169,189 (12.6%) $187,800 (11.0%) $206,200 (9.8%)
Ontario
$299,544 (7.6%) $312,400 (4.3%) $322,000 (3.1%)
Quebec
$208,240 (7.3%) $218,000 (4.7%) $224,900 (3.2%)
New Brunswick
$136,603 (7.7%) $142,800 (4.5%) $148,200 (3.8%)
Nova Scotia
$180,989 (7.3%) $189,100 (4.5%) $196,400 (3.9%)
PEI
$133,457 (6.4%) $141,000 (5.7%) $146,300 (3.8%)
Newfoundland
$149,258 (7.0%) $159,200 (6.7%) $167,700 (5.3%)

(Source: Canadian Real Estate Association/Globe & Mail)