Housing markets are expected to remain stable for the rest of the year, and starts are expected to moderate in 2015 and 2016 according to the Canada Mortgage and Housing Corporation (CMHC).
“Lower oil prices are contributing to disparities between provincial housing markets,” Bob Dugan, chief economist for CMHC said in an official release. “A slowdown in housing starts and resale transactions in oil-producing provinces such as Alberta will be partly offset by increased housing market activity in other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates.”
Housing starts are expected to decline by 4.1 per cent – and range between 166,540 and 188,580 units — in 2015. Prices, meanwhile, are expected to increase by 3.4 per cent.
As for the near future, housing starts are expected to range between 162,840 and 190,830 in 2016.
“Since the inventory of completed and unabsorbed units remains above the historical average, we expect the pace of new home construction to moderate over the next couple of years as builders focus on managing the existing inventory,” Dugan said.
The average price is expected to fall between $402,139 and $439,586 this year and between $398,191 and $457,200 in 2016.
“The gradual slowdown in the rate of price growth is explained by the expected change in the composition of MLS® sales toward more moderately priced homes,” the Crown Corporation said in its official release. Due to the recent decline in oil prices, our assessment is that there is more downside risk than upside risk to our forecast.