Stable outlook for Canada’s housing market in 2012

In its fourth quarter outlook, CMHC predicts the average price will increase 1.2% from $363,900 in 2011 to $368,200 in 2012. Sales will rise from 450,100 units in 2011 to 458,500 in 2012, up 1.9%. Housing starts, however, will drop 2.2% from 191,000 in 2011 to 186,750 in 2012, according to the CMHC outlook.

Global economic concerns have resulted in growing fears about how that might impact Canada’s market, but CMHC Deputy Chief Economist Mathieu Laberge said the country’s real estate market will remain strong.

“Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration,” said Laberge. “These factors will continue to support Canada’s housing sector in 2012.”

In Vancouver and Abbotsford, where average-price growth has topped any other Canadian city, the average will gain 3.2% in 2012, on top of 5.3% gains forecasted for this year.  

Unemployment there will drop from 7.9% to 7.5%, said the CMHC report. Sales activity, however, will start to tail off from the 7.3% growth in 2011 to 3.3% growth in 2012.

The market will likely continue to attract builders, with housing starts expected to rise 9.4% in 2012 and building on 5.1% gains in 2011 over 2010.

In the Greater Toronto Area, apartment starts are expected to be 37.5% higher in 2011 over 2010, totalling 18,200 stats in 2011. Those numbers won’t slow in 2012, as apartment units will gain another 1.6% to reach 18,500 in 2012.

Overall housing starts will drop 2.3% in Toronto, CMHC predicts, largely based on a 14.1% drop in single-detached starts, from 8,500 in 2011 to 7,300 in 2012.

Toronto price gains will also slow, from 4.3% gains in 2011 to 1.4% gains in 2012 to an average of $457,500.

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