Canada Mortgage and Housing Corporation (CMHC) expects the number of housing starts to stabilize in 2014 and 2015. Support from improved economic and demographic fundamentals will be tempered by a combination of a modest and gradual increase in mortgage rates and a slowdown in demand from first-time buyers, according to CMHC’s first quarter 2014 Housing Market Outlook, Canada Edition1.
“With a relatively high number of units currently under construction, we expect builders will gradually adjust their activity in order to reduce their level of inventory,” said Mathieu Laberge, Deputy Chief Economist for CMHC. “Housing demand for resale market homes will continue to be sustained despite expected modest and gradual increases in mortgage rates toward the end of the forecast horizon,” added Mathieu Laberge.
On an annual basis, housing starts are expected to range between 176,600 and 199,800 units in 2014, with a point forecast of 187,300 units, relatively unchanged from 187,923 units in 2013. In 2015, housing starts are expected to range from 163,200 to 206,600 units, with a point forecast of 184,900 units.
Multiple Listing Service® (MLS®2) sales are expected to range between 436,000 and 497,000 units in 2014, with a point forecast of 466,500 units, up from 457,485 in 2013. In 2015, sales are expected to range from 443,400 to 506,000 units, with an increase in the point forecast to 474,700 units.
The average MLS® price is forecast to be between $380,100 and $400,700 in 2014 and between $384,300 and $409,900 in 2015. CMHC’s point forecast for the average MLS® price calls for a 2.1 per cent gain to $390,400 in 2014 and a further 1.7 per cent gain to $397,100 in 2015.
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.
For more information, call 1-800-668-2642. CMHC Market Analysis standard reports are also available free for download at http://www.cmhc.ca/housingmarketinformation.
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1 The forecasts included in the Housing Market Outlook reflect information available as at January 22, 2014. 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.
Information on this release:
Karine LeBlanc, Media Relations