The Canadian Press - ONLINE EDITION

Housing starts to stabilize as interest rates rise and demand slows: CMHC

  • Print

OTTAWA - Builders will likely reduce housing starts in 2014 and 2015 as they adjust to rising interest rates and a slowdown in demand from first-time buyers, Canada Mortgage and Housing Corp. says.

"While housing demand will be supported by an improvement in fundamentals, total housing starts will remain more or less stable over the forecast horizon," CMHC said in an outlook issued Thursday.

"With a relatively high number of units under construction in some local markets, builders are expected to adjust the pace of new activity in order to manage their inventory levels."

CMHC estimates there will be about 187,300 housing starts in 2014, with a range of between 176,600 and 199,800 units on an annual basis.

That's relatively unchanged from 187,923 units in 2013.

In 2015, CMHC estimates about 184,900 units, with a range from 163,200 to 206,600 units.

CMHC also that sales of existing housing through the multiple listing service, run by Canada's main real estate boards and realtors, are expected reach 466,500 units this year and 474,700 units in 2015.

That compares with 457,485 in 2013.

The average MLS price is expected to increase 2.1 per cent to $390,400 this year and another 1.7 per cent to $397,100 in 2015.

"In line with expectations that most local housing markets will remain in or near balanced market conditions, the average MLS price average for Canada is expected to grow at a rate near inflation over the forecast horizon," CMHC said.

The CMHC outlook follows a report earlier this week by TD Bank that suggested home prices in Canada were about 10 per cent overvalued, based on current expectations for interest rates.

However, TD cautioned that the overvaluation in markets like Toronto, Vancouver, Montreal and Ottawa was likely higher.

The Canadian housing market and the risk of a downturn has been highlighted as a key concern for the economy by policy-makers.

Recent indicators have suggested, that a soft landing may be in the works for the market, but worries about a bubble bursting have persisted.

CMHC said housing starts will moderate in seven out of 10 provinces this year with Alberta, British Columbia and Quebec expected to post gains.

Housing starts in 2015 are expected to post a modest rebound in Manitoba and in Quebec, with British Columbia showing no change.

The other provinces are forecast to see housing starts moderate.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Jim Flaherty remembered at visitation as irreplaceable

View more like this

Photo Store Gallery

  • An American White Pelican takes flight from the banks of the Red River in Lockport, MB. A group of pelicans is referred to as a ‘pod’ and the American White Pelican is the only pelican species to have a horn on its bill. May 16, 2012. SARAH O. SWENSON / WINNIPEG FREE PRESS
  • Young goslings are growing up quickly near Cresent Lake in Portage La Prairie, Manitoba- See Bryksa 30 Day goose project- Day 11- May 15, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

What are you most looking forward to this Easter weekend?

View Results

View Related Story

Ads by Google