Looking forward to 2012, CMHC expects housing starts to move into stable territory, according to the newly released fourth quarter Housing Market Outlook, Canada Edition.
Although economic uncertainty continues to brew overseas and in the US, CMHC points to the existence of found fundamentals in the Canadian housing market that will continue to lend support to the industry.
“Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration. These factors will continue to support Canada’s housing sector in 2012,” said Mathieu Laberge, Deputy Chief Economist for CMHC.”
Although housing starts have been robust to date, likely because of the continued low interest rate environment, they forecast housing starts to be in the range of 170,900 to 199,900 units in 2011, with a point forecast of 191,000 units. Looking forward to 2012, housing starts will be in the range of 161,650 to 206,350 units, with a point forecast of 186,750 units.
CMHC expects that existing home sales will be in the range of 423,600 to 470,100 units in 2011, with a point forecast of 450,100 units. In 2012, MLS® sales will experience modest growth, with a prediction in the range of 406,100 to 509,000 units, with a point forecast of 458,500 units.
Looking at average prices, CMHC says that the market through 2012 will be characterized by balance: “The average MLS® price is forecast to be between $353,100 and $375,300 in 2011 and between $315,800 and $418,700 in 2012. CMHC’s point forecast for the average MLS® price is expected to move up to $363,900 in 2011, while 2012 will see a more moderate increase to $368,200. The increase in the average MLS® price is consistent with the balanced market conditions that have occurred so far in 2011, and that are expected next year.”