12th
Housing markets easing
Canadian Funding Corporation blogs about:
Housing starts: The downturn in economic activity and in the employment market will lead to
housing starts that will vary from 141,000 to 180,000 in 2009 and much the same range in 2010. Both singles and multiples will see declines in 2009. Resales: Sales of existing homes through the Multiple Listing Service®2 (MLS®) are forecast to decline 14.6 per cent this year compared to last year’s level, but increase 9.3 per cent in 2010. Resale prices: After several years of strong gains, the average MLS® price is expected to decline by 5.2 per cent in 2009 as sales of existing homes moderate and new listings continue to increase. The average MLS® price is expected to see minimal change in 2010.
Canadian Funding Corporation blogs about:
Provincial Spotlight
Saskatchewan: Despite lower prices for uranium, crude oil, and agriculture, the natural resource sector will sustain economic growth in Saskatchewan. Nevertheless, given high inventory levels of completed and unoccupied units, housing activity in the province will moderate from peak levels in 2008, with some pick-up in 2010. British Columbia: Economic growth is set to moderate in the province, but will remain stronger than the national average. New home construction will decline over the forecast period. High levels of existing homes listed for sale, as well as fewer overall home sales, has created buyers’ market conditions throughout the province.
Canadian Funding Corporation blogs about:
Economic Forecasts National Housing
Outlook In Detail
Forecasts for economic growth by private sector forecasters have been revised down significantly in recent months. For example, in October of last year, the average forecast for Canadian GDP growth in 2009 was 1.1 per cent. By January, this average forecast for Canadian GDP growth in 2009 was revised down to -0.7 per cent. Housing starts this year will decrease to a level ranging between 141,000 and 180,000 in 2009, then increase marginally in 2010. Both single and multiple starts will decrease.
The new home market is moderating due to four key factors. First, strong house price growth between 2002 and 2007 has tempered home ownership demand particularly in Western Canada. Second, the record high levels of new listings have increased the competition from the existing home market and reduced spillover demand. Third, pent-up demand that built up during the 1990s is nearly exhausted and new home construction will become more aligned with long run demographic demand. And, finally, uncertainty about the economic outlook remains high and is a contributing factor restraining demand for home ownership.
