Canadian Housing market to strengthen in 2010 - CMHC

Housing starts will likely fall 32.8 per cent this year to 141,900 from last year's levels, Canada Mortgage and Housing Corp. estimates. New home building is expected to recover next year though, with a projected level of 164,900 for 2010, the agency said in its fourth-quarter housing market outlook.

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The average listed price will increase to $312,950 this year and rise further to $324,500 in 2010, with British Columbia continuing as the most expensive place to live.

“We expect housing markets across Canada to strengthen leading into and over the course of 2010 as economic conditions improve,” said CMHC's chief economist Bob Dugan.

Demand for homes has rebounded since the start of this year, he noted. And both new and existing home markets are seeing lower inventory levels.

“As a result, stronger housing demand will be reflected in higher levels of housing starts in 2010.”

The strong pace of sales in the second and third quarters of this year partly reflects activity that was delayed in the previous two quarters “and is not likely to be sustained,” the report said.

Existing home sales will reach 441,300 units in 2009 and increase to 445,150 units in 2010, as measured by the Multiple Listing Service.

Among provinces, housing starts in Saskatchewan will slide to just 3,600 units this year, nearly half levels of the previous year. A strong economy and a relatively robust labour market, which will attract migrants to the province, will cause housing starts to rebound to 4,350 units next year, CMHC expects.

In Ontario, where activity has likely plunged 36.9 per cent this year from last year's level, starts are seen recovering to 56,500 units.

The government agency also extended its forecast into 2013. It expects activity to increase to 187,000 units by 2013 as migration bolsters population growth. Activity will be particularly strong in Alberta and B.C.