Canada housing agency cuts 2014 starts forecast

Reuters

By Andrea Hopkins

TORONTO, Oct 31 (Reuters) - Canada's federal housing agencyhas bumped up its forecast for housing starts in 2013 buttrimmed its forecast for 2014, setting an essentially flatoutlook for a once-roaring market.

The Canada Mortgage and Housing Corp said on Thursdayhousing starts will be in a range of 179,300 to 190,600 units in2013, with a point forecast, or most likely outcome, of 185,000.That is up from its August estimate of 182,800.

The agency said there will be 163,700 to 205,700 unitsstarted in 2014, with a point forecast of 184,700. That is downfrom CMHC's August estimate of 186,600.

Both forecasts represent a sharp slowdown from the 214,827starts of 2012.

Canada sidestepped the worst of the financial crisis of thelast decade because it avoided the real estate excesses of itsU.S. neighbor, and a post-recession housing boom helped itrecover more quickly than its Group of Seven peers.

But the housing market began to cool last year after thecountry's Conservative government, worried about a potentialproperty bubble, tightened mortgage rules.

While some economists still worry that the U.S. housingcrash of the last decade may be repeated in Canada, the CMHCforecasts see homebuilding and sales leveling off, with pricescontinuing to notch small gains.

CMHC said existing home sales will range from 439,400 to474,000 in 2013, with a point forecast of 456,700 units. That'sup slightly from August's forecast of 448,900 units and aboutequal with the 454,005 sales in 2012. For 2014, it expects amove up to a range of 438,300 to 498,100, with an increase inthe point forecast to 468,200. That's up slightly from August'sforecast of 467,600.

Price gains are expected to slow in 2013 and 2014. CMHC'spoint forecast for the average price calls for a 4.0 percentgain to C$378,000 ($361,600) in 2013, and a 1.9 percent gain toC$385,200 in 2014.

View Comments (0)