After rebounding in the second half of 2009 and early 2010, housing starts are expected to moderate in the second half of 2010. Starts are expected to stabilize at levels consistent with demographic fundamentals in 2011, according to Canada Mortgage and Housing Corporation’s (CMHC) third quarter Housing Market Outlook, Canada Edition.
Housing starts are expected to be in the range of 170,200 to 198,400 units in 2010, with a point forecast of 184,900 units. In 2011, housing starts will be in the range of 146,900 to 210,500 units, with a point forecast of 176,900 units.
"Housing starts will moderate in the coming months as activity becomes more in-line with long term demographic fundamentals,” said Bob Dugan, Chief Economist for CMHC.
Mr. Dugan also noted that the existing home market conditions will remain balanced over the next two years as MLS®2 sales ease and inventory levels remain elevated. Existing home sales will be in the range of 450,000 to 485,700 units in 2010, with a point forecast of 463,800 units. In 2011, MLS® sales will move lower and are expected to be in the range of 425,000 to 490,700 units, with a point forecast of 456,000 units.
With an improved balance between demand and supply, the average MLS® price is expected to edge lower through the end of 2010 and then rise modestly in 2011.
CMHC August31, 2010