(Ottawa) A report from the Canada Mortgage and Housing Corporation (CMHC) indicates that high interest rates led to a drop in housing starts of approximately 30,000 units last year.
The slowdown in new construction resulted in a 10 to 15 percent reduction in the number of housing starts for the year, the state housing agency said.
CMHC Deputy Chief Economist Aled ab Iorwerth said high rates had impacted the construction of new condominiums across most of the country.
CMHC added that the effect of the rate increase was offset by other economic factors and government policies aimed at supporting the construction of rental properties.
Fixed-rate mortgages increased in 2022 and 2023 as the Bank of Canada raised its key interest rate in its fight to control inflation.
However, mortgage rates have since fallen from recent highs as the central bank began cutting rates earlier this year and is expected to continue to do so.