OTTAWA, ONTARIO--(Marketwire - Feb 22, 2013) - Moderation in economic and employment growth in the second half of 2012 has led to more modest housing demand. With continued moderation expected in the first half of 2013, total annual housing starts are expected to be lower in 2013 relative to 2012, according to Canada Mortgage and Housing Corporation''s (CMHC) first quarter 2013 Housing Market Outlook, Canada Edition1.
As fundamentals, including employment, economic growth and net migration are expected to gain momentum later in 2013 and in 2014, housing starts are expected to trend slightly higher next year.
"CMHC expects housing construction activity will trend lower in the first half of 2013, before gaining more momentum by the end of the year as economic and employment growth remain supportive of the Canadian housing market," said Mathieu Laberge, Deputy Chief Economist for CMHC. "In 2014, improving economic conditions may be partially offset by a slight moderation in the number of first-time homebuyers, and potential small and steady increases in mortgage interest rates."
On an annual basis, housing starts are expected to range between 178,600 to 202,000 units in 2013, with a point forecast of 190,300 units, following a level of 214,827 units in 2012. In 2014, housing starts are expected to range from 171,200 to 217,000 units, with a point forecast of 194,100 units.
Existing home sales are expected to range between 418,200 to 484,000 units in 2013, with a point forecast of 451,100 units, following a level of 453,372 in 2012. In 2014, Multiple Listing Service® (MLS®)2 sales are expected to range from 439,600 to 505,000 units, with an increase in the point forecast to 472,300 units.
The average MLS® price is forecast to be between $356,500 and $378,500 in 2013 and between $363,800 and $390,800 in 2014. CMHC''s point forecast for the average MLS® price calls for a 1 per cent gain to $367,500 in 2013 and a further 2.7 per cent gain to $377,300 in 2014.
As Canada''s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.
This release is also available at CMHC.ca/Newsroom.
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1 The forecasts included in the Housing Market Outlook reflect information available as of January 22, 2013. Where applicable, forecast ranges are also presented in order to reflect financial and economic uncertainty.
2 Multiple Listing Service® (MLS®) is a registered trademark owned by the Canadian Real Estate Association.