Author: Dean Terry
Housing starts rebounded in the second half of 2009, and it is expected to strengthen in 2010 according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition.
In 2009, there was a total of 149,081 units, housing starts are expected to be in the range of 152,000 to 189,300 units in 2010, with a point forecast of 171,250 units.
In 2011, housing starts will be in the range of 156,400 to 205,600 units, with a point forecast of 175,150 units.
Chief Economist for CMHC, Bob Dugan noted that the existing home market has shifted from a buyer’s market, at the beginning of 2009, to a seller’s market. With the relative lack of listings for existing homes has pushed some of the demand into the new home market, which can help explain the forecast made for higher housing starts activity in 2010.
The pace of the Multiple Listings Service (MLS) sales seen in the second to fourth quarters of 2009 reflects, in the activity that was delayed in the previous two quarters.
This pace is unlikely to be sustained as pent up demand, as it has exhausted and financing costs increase with anticipated higher interest rates later in 2010.
The results of this will be that existing home sales will be in the range of 455,350 to 509,900 units in 2010, with a point forecast of 486,700 units. It is expected to lower slightly in 2011, within the range of 426,300 to 494,600 units, with a point forecast of 469,950 units.
With the balance improving between supply and demand, the average MLS price is expected to remain close to the average of the last quarter of 2009, for most of 2010, and then rise modestly in 2011.
Jeff Markewich
Broker of Record with InfoMarket Group GMAC Real Estate
www.imgrealestate.ca
