Canada’s new home market is expected to continue to moderate

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Mortgage rates

Canadian Money

THUNDER BAY – “A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year. Nevertheless, employment growth and net migration will help support housing starts activity going forward,” said Mathieu Laberge, Deputy Chief Economist for CMHC.

Canada’s new home market is expected to continue to moderate in the last quarter of 2012 and into 2013. Meanwhile, activity in the existing home market is expected to hold steady, leading to house price growth in line with or slightly below inflation, according to Canada Mortgage and Housing Corporation’s (CMHC) fourth quarter 2012 Housing Market Outlook, Canada Edition.

On an annual basis, housing starts will be in the range of 210,800 to 216,600 units in 2012, with a point forecast of 213,700 units. In 2013, housing starts will be in the range of 177,300 to 209,900 units, with a point forecast of 193,600 units.

Existing home sales will be in the range of 449,200 to 465,600 units in 2012, with a point forecast of 457,400 units. In 2013, MLS®2 sales are expected to move up in the range of 433,300 to 489,700 units, with a point forecast of 461,500 units.

The average MLS® price is forecast to be between $363,200 and $367,000 in 2012 and between $363,100 and $377,900 in 2013. CMHC’s point forecast for the average MLS® price calls for a 0.2 per cent gain to $365,100 for 2012 and a 1.5 per cent gain to $370,500 for 2013.

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