Housing starts to decline in 2011: CMHC

OTTAWA — Home construction is expected to continue easing in the final quarter of this year before stabilizing in 2011, according to Canada Mortgage and Housing Corp.

The federal agency on Monday forecast housing starts to range between 176,700 and 194,700 units 2010, and between 148,000 to 202,300 units next year as the market returns to “levels consistent with demographic fundamentals.”

“High employment levels and low mortgage rates will continue to support demand for new homes in 2011,”said CMHC chief economist Bob Dugan. “Nevertheless, housing starts will decrease to levels are more in-line with long term demographic fundamentals next year.”

Dugan said the existing market conditions will remain balanced over the next two years, with sales easing and inventory levels remaining high.

Existing home sales will be in the range of 423,800 to 455,900 units this year and then decline to between 390,600 to 483,700 units in 2011.

CMHC said “with an improved balance between demand and supply”the average sales price will be “only modestly higher” next year.

Meanwhile, the Canadian Real Estate Association released its home resale report on Monday, showing activity rose in October for the third straight month.

Seasonally adjusted sales were up 4.6 per cent in October, similar to the increases seen in August and September, CREA said.

Source: The Vancouver Sun

“As a result, activity now stands 13.3 per cent above July levels, when it reached this year’s low point,”the Ottawa-based industry group said.

“Three-quarters of local markets posted monthly increases in seasonally adjusted activity in October, led by Toronto and Vancouver.”