Alberto Masnovo via Getty Images Housing market slumps like the one Canada is seeing usually happen in recessions, BMO says.

MONTREAL — Usually, when Canada's housing market is this badly in the dumps, the country is in a recession, according to a research note from the Bank of Montreal. Canada's economy ground to a near-halt at the end of 2018, according to data from Statistics Canada, with growth slowing to a 0.4-per-cent annual rate in the fourth quarter. Among the weakest parts of the economy recently have been anything related to the housing market. Watch: Should Canadians be worried about a recession in 2019? Story continues below.

Residential investment, which includes building new homes and buying and/or renovating existing homes, has dropped 7.5 per cent over the past year, BMO senior economist Robert Kavcic said in a report earlier this week. "Historically, declines of this magnitude in such an important sector have usually correlated with a broader recession," Kavcic wrote in a client note. He produced a chart showing a clear correlation (but not necessarily causation) between recessions and large declines in residential investment.

BMO Economics The shaded areas represent a recession. Residential investment reached a record-high share of Canada's economy in recent years, but has started turning downwards. BMO says when the metric turns strongly downwards, there's usually a recession.