Home Building Market On Downswing

Ottawa’s new home industry, a sizzling sector of the economy in the first years of the decade, has slowed sharply in the past 18 months.

According to Statistics Canada, 1,983 new housing units were approved between January and May.

And while StatsCan building permits that’s hardly an indication that the market is "falling down," it’s a sharp reversal from 2002, when permits were issued during the same period for construction of nearly 3,300 homes.

The boom began in 2001 with 2,855 new housing units and continued through 2004 with permits for another 2,878.

The month of May continued a sluggish trend that has been going on since early last year, with the value of residential building permits down 7.1 % from the month before and about 32% lower than the average month in 2005.

The entire housing market in Central Canada is cooling a little bit and Ottawa is part of that trend.

The StatsCan figures for building permits came just a day after a real estate report showing that resale homes in Ottawa have increased just 4.4% in the past 12 months - less than half the national average.