Mortgage rules to push housing lower: CMHC
Housing starts and sales will fall more into line with “demographic fundamentals” this year and next, according to the latest housing outlook from the Canadian Mortgage and Housing Corporation.
The crown agency said it expects housing starts will range between 166,600 to 192,200 units in 2011, with a point forecast of 179,500. That’s a slight dip from 2010 numbers, when Canada saw 189,930 housing starts.
“Modest economic growth, in conjunction with relatively low mortgage rates, will continue to support demand for new homes in 2011 and 2012,” Bob Dugan, chief economist for CMHC, said in a release. “Nonetheless, we are expecting new and existing housing markets to fall in line with demographic fundamentals, as changes to mortgage rules take hold.”
CMHC expects housing starts to grow again in 2012, with a forecast of between 163,200 to 207,000 starts, and a point forecast of 185,300 units.
The crown agency also expects home prices to start moderating later this year, and to end up lower next year. In its forecast, CMHC said prices this year will still record an overall increase due to monthly gains seen in the first half of 2011, but moderating prices will take hold in the the second half and continue throughout 2012.
CMHC does expect existing home sales to climb this year and in 2012, however. The crown agency forecasts a range of between 429,500 to 480,000 units in 2011, with a point forecast of 452,100. That’s compared to the roughly 447,010 homes that traded hands over the Canadian MLS System in 2010.
For 2012, CMHC forecasts existing home sales to range between 410,000 to 511,900 units, with a point forecast of 461,3000.