BuzzBuzzHome Corp.
May 30, 2011
According to the Canada Mortgage and Housing Corporation’s second quarter Housing Market Outlook, released today, housing starts are “forecast to stabilize at levels consistent with demographic fundamentals in 2011 and 2012.”
This translates to a forecast of about 179,500 units nation-wide for 2011 – down from 189,930 units in 2010. The forecast for 2012 is approximately 185,300 units.
The mild decline is expected to affect both single-detached homes as well as multi-family housing, including row houses, semi-detached homes.
“Modest economic growth, in conjunction with relatively low mortgage rates, will continue to support demand for new homes in 2011 and 2012. Nonetheless, we are expecting new and existing housing markets to fall in line with demographic fundamentals, as changes to mortgage rules take hold,” said Bob Dugan, Chief Economist for the CMHC.
Naturally, not all regions of Canada will perform evenly. In Ontario and British Columbia, for example, declines in 2011 are expected to be “very modest.” While in 2012, “housing starts are forecast to increase markedly in British Columbia, and Alberta, while Manitoba, Ontario, and Saskatchewan will experience modest growth.”
Focusing on the Greater Toronto Area’s condominium market, the CMHC forcecasts that, “A slower pace for new home sales and construction is expected for the second half of 2011. High-rise condominium sales and starts have been running at peak levels that are unsustainable for the rest of the year. The moderation in high-rise construction activity, however, will be short-lived as the recent strength in pre-construction sales drives condo starts back up in 2012.”
The report points out that sales for new condominiums in Toronto begun this year with such strength that should current rates hold, the sales total for 2011 would break the previous annual record by over 30 percent.
