CMHC: Housing market to slow in rest of 2012, into 2013
Workers work on a new home on Friday, March 23, 2012. . (AP Photo/Steve Helber)
Published Tuesday, August 14, 2012 8:55AM EDT
Last Updated Tuesday, August 14, 2012 10:48AM EDT
OTTAWA -- Canada Mortgage and Housing Corp. is forecasting a moderate slowdown in new-home construction starts as well as sales of existing housing.
The Ottawa-based federal agency isn't calling for a major decline, but its latest forecast suggests next year will be somewhat softer than estimates CMHC issued in June while 2012 may be somewhat stronger than previously expected.
CMHC has been saying for some time that it expects housing prices in most local markets will grow more slowly than they have been recently.
It says housing starts and home sales have been strong in 2012 -- particularly when it comes to multiple-dwelling units such as condos and apartments -- but will soften moderately in coming months into 2013.
"Balanced market conditions in most local housing markets will result in a slowing in house price growth as well," Mathieu Laberge, CMCH's deputy chief economist, said in an outlook released Tuesday.
CMHC provides various levels of mortgage insurance to protect lenders from defaults by home buyers. It also closely monitors residential construction activity and housing sales and provides outlooks used by various sectors of the economy.
In the latest forecast, CMHC estimates there will be between 196,800 and 217,000 units of housing started in 2012, with a point forecast of 207,200 units.
The point forecast is slightly higher than an estimate of 202,700 issued by CMHC in June, when the range was wider at between 182,300 to 220,600.
In 2013, CMHC now estimates housing starts will be in the range of 173,000 to 207,400 units, with a point forecast of 193,100 units -- about seven per cent fewer than this year under the latest forecast.
The previous 2013 point forecast for 195,700 housing starts.
Based on data compiled by the Canadian Real Estate Association, CMHC said Tuesday that it expects about 466,600 units of existing housing to be sold this year and 469,600 units in 2013.
The average price for property sales through CREA members is forecast to be between $351,300 and $378,400 in 2012 and between $358,000 and $395,800 in 2013, CMHC said Tuesday.
CMHC's point forecast for the average price is now $368,000 for 2012 and $377,300 for 2013, the agency said Tuesday Its June was the average price to be $372,700 for 2012 and $383,600 for 2013.