Revised forecast puts grin on investor faces

"CMHC expects housing construction activity will trend lower in the first half of 2013, before gaining more momentum by the end of the year as economic and employment growth remain supportive of the Canadian housing market," the corporation’s Deputy Chief Economist Mathieu Laberge said in a statement Friday. "In 2014, improving economic conditions may be partially offset by a slight moderation in the number of first-time homebuyers, and potential small and steady increases in mortgage interest rates."

For this year, housing starts will be in the range of 178,600 to 202,000 units, according to the latest quarterly report, pinpointing it at 190,300 starts. That’s down from 214,827 in 2012. Still, of even greater concern, say some economists, the forecast is down from by more than 10,000 units from November’s forecast for 2013.

Job gains – or the lack thereof – are a large part of that drag expected for the rest of this year.

Still, that, and a dull overall economy, will likely impact 2014 more than CMHC bargained for in November.

Then, sales are expected to range from 439,600 to 505,000 units, most likely settling near the 472,300 mark.

But a slowing home-buying market should benefit property investors in protecting, and even decreasing, vacancy rates and so rental values.

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