A pair of reports from Canada. "The Toronto housing market is showing signs of softening and a real estate analyst says that means it may have reached a plateau where bidding wars will continue for now but not for long. (Analyst) Jason Mercer says home buyers should not expect prices to drop drastically for Toronto homes as they did in the late 1980s when speculators sent the market into overdrive."

"The latest figures suggest that housing starts in the United States peaked in January 2006, then edged down, and that decline reached Toronto in April."

"By the end of the year, Mercer says, the market will balance out and buyers will be on a more equal footing with sellers. 'We're right on the cusp between a seller's market and a balanced market,' he said."

"Canada's housing agency is warning that the growing number of unsold new condominium units in downtown Montreal threatens the stability of the marketplace. The CMHC noted there are 225 finished and unoccupied condo units downtown, with another 2,200 either planned or under construction. The inventory buildup is worrisome because only 730 condos were sold in all of downtown last year."

"'The market is in real danger of oversaturation,' said CMHC market analyst Paul Cardinal. 'That was the outlook in November, when we did our 2006 forecast. We keep repeating it in the hope the builders will take note.'"

"This year, CMHC forecasts nearly as many condo units will be built across the metropolitan area (8,000) as single-family homes (8,500). That stands in stark contrast to 1990, when condo construction accounted for 13 per cent of new-home activity."

"In central Montreal, several large projects appear to be stalled or behind schedule. Backers of Le Riopelle, a condo-hotel project originally set for delivery last November, now expect to break ground this fall. Nearby, Le Mosaique Southam, another high-end development, is similarly stalled. SLEB has run into financial problems and is reorganizing."

"'Everyone thinks that their project is different and that the other guy is the one at risk,' Cardinal said. He added that local builders might be pulling back or fine-tuning their projects, but those working with foreign investment partners, and there are growing numbers of them, are less concerned with having units sit empty and unsold."

"'For Americans, it is nothing to put a building up without a single sale. It's a different attitude,' he said."

"On the resale side, CMHC is forecasting a one-per-cent drop in sales as higher interest costs push some first-time buyers to the sidelines. The number of active listings will continue to rise, including on the condo side, where the pool of available properties is expected to jump 46 per cent."