OTTAWA, Sept. 18 /CNW Telbec/ - Canadian builders can expect their second
consecutive year of lower profits in 2008, as demand for new home construction
weakens, according to the Conference Board's Canadian Industrial Outlook:
Canada's Residential Construction Industry - Summer 2008.
"This slowdown is an overdue correction in the market, after housing
supply outstripped demand for several years," said Michael Burt, Associate
Director, Industrial Outlook. "We are now moving into a buyer's market, as
home construction and sales activity return to a more normal pace.
"Market conditions in the U.S. have little effect on the Canadian market,
so there is little evidence of a looming market crash in this country. Also,
lending practices in Canada are much more prudent."
Following years of large increases in many markets, price appreciation
has slowed considerably. New home prices are rising at their slowest pace
since 2002 because demand is slowing in response to weaker economic conditions
and constrained affordability.
Builders' profit levels doubled between 2004 and 2006. However, industry
profits declined by 16 per cent last year and are expected to fall by a
further three per cent this year, to $3.6 billion. Profits are forecast to
fall again in 2009, before beginning to improve in 2010 and beyond as the
market stabilizes and demand recovers.
For further information:
For further information: Brent Dowdall, Media Relations, (613) 526-3090
ext. 448, firstname.lastname@example.org; www.conferenceboard.ca