Housing Starts Projected to be Lower in 2013 With a Modest Increase in 2014: CMHC
Canada Mortgage and Housing Corporation (CMHC) expects housing starts to re-gain momentum in the later part of the year and/or into 2014, as employment, economic growth and net migration are forecast to improve over the forecast horizon. Overall, total annual housing starts are expected to be lower in 2013 compared to 2012, mostly due to moderation observed in the first half of 2013, according to CMHC’s second quarter 2013 Housing Market Outlook, Canada Edition1.
“So far in 2013, the average monthly growth rates of MLS® sales, new listings and prices have all been increasing. This follows a period of average monthly declines that held sway over the second half of 2012,” said Mathieu Laberge, Deputy Chief Economist for CMHC. “This change in the trend of the resale market is expected to eventually lead to a similar change in the trend of the new home market, as housing starts dynamics typically lag the resale market by one to three quarters.”
On an annual basis, housing starts are expected to range between 173,300 to 192,500 units in 2013, with a point forecast of 182,900 units, following a level of 214,827 units in 2012. In 2014, housing starts are expected to range from 166,500 to 211,300 units, with a point forecast of 188,900 units.
Existing home sales are expected to range between 412,000 to 474,800 units in 2013, with a point forecast of 443,400 units, following a level of 453,372 in 2012. In 2014, Multiple Listing Service® (MLS®2) sales are expected to range from 435,800 to 501,400 units, with an increase in the point forecast to 468,600 units.
The average MLS® price is forecast to be between $359,400 and $380,000 in 2013 and between $362,400 and $392,200 in 2014. CMHC’s point forecast for the average MLS® price calls for a 1.6 per cent gain to $369,700 in 2013 and a further 2.1 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.
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.
1 The forecasts included in the Housing Market Outlook reflect information available as of April 26, 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.