CMHC: Whoa! slowing market ahead

by Vernon Clement Jones on 14 Aug 2012

"Canada's housing markets are expected to moderate over the rest of 2012 and into 2013 after showing sustained activity levels, specifically in the multiples segment, over the first half of 2012," said Mathieu Laberge, deputy chief economist for for the Crown corporation in referencing the Housing Market Outlook. "Balanced market conditions in most local housing markets will result in a slowing in house price growth as well."

More specifically, and on an annualized basis, housing starts will be in the range of 196,800 to 217,000 units in 2012, says CMHC. Property investors can also expect a point forecast of 207,200 units.

That won't change dramatically in 2013, according to the report, pegging housing starts as in the range of 173,000 to 207,400 units, with a point forecast of 193,100 units.

That predicted slowdown is a tamer drop than the 10 per cent decline in values and sales some bank economists are now predicting for the next 24 months.

Still, even under the scenario laid out by CMHC, investors with financing in place are likely to find fewer competitors for properties, both single- and multi-family.

That phenomenon has everything to do with the tighter mortgage rules introduced last month and already being blamed for a slowing condo market in Toronto and other key markets such as Vancouver.

That's likely to remain the status quo headed into 2013, according to CMHC.

"MLS sales are expected to move up in the range of 440,500 to 487,600 units, with a point forecast of 469,600 units."

In terms of prices, the average price is forecast to be between $358,000 and $395,800 in 2013 -- still higher than the $351,300 and $378,400 range CMHC is calling for by the close of 2012.

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