The Globe’s Real Estate Beat offers news and analysis on the Canadian housing market from real estate reporter Tara Perkins. Read more on The Globe’s housing page and follow Tara on Twitter @TaraPerkins.
Canada Mortgage and Housing Corp. released a new forecast this week that was more bullish about Canadian prices, sales and construction than its prior forecast in May. But the national figures meld together very different markets from coast to coast. Here’s a regional breakdown of what CMHC is expecting.
-Housing starts are expected to be relatively constant.
-The construction mix is forecast to shift toward more detached houses and fewer condos as the economy strengthens.
-Stronger economic and job growth should support demand, and resale market conditions are expected to remain balanced.
-CMHC now forecasts 27,500 homes will begin construction this year, followed by 27,900 next year. (It’s revised down this year’s number a tad – in May it was expecting 27,800 starts this year).
-The average price of a home is now expected to be $553,300 this year and $556,500 next. (CMHC revised these numbers up – in May it was expecting $550,400 this year and $552,300 next).
-CMHC says housing activity in Ontario will regain momentum this year before easing later in 2015.
-Rising home prices are likely to prompt a shift in demand toward less expensive types of homes and less expensive areas. As a result, CMHC says it’s more bullish on the higher density housing sector.
-Fewer Ontarians are expected to move to western Canada, providing some added support for Ontario’s housing market by next year.
-CMHC says that “Ontario home prices will grow at a slower rate over the forecast horizon.”
-CMHC now forecasts home starts in Ontario to slow to 57,100 this year, and then stabilize next year. (In May it was forecasting 55,400 starts this year).
-CMHC now expects 197,900 existing homes to change hands this year, followed by 202,500 homes next year. (In May it was forecasting 193,500 sales this year, and 201,700 next).
-Slower economic growth and continued negative net-migration will weigh on the market.
-CMHC says housing starts and sales will be slower as a result.
-CMHC forecasts housing starts to fall by about 14 per cent this year and then by a further 3 per cent next year. (In May it was expecting starts to fall by about 10 per cent this year, followed by 4 per cent next year).
-Starts in buildings with multiple units, such as condos, are expected to fall 18 per cent this year and then 9 per cent next year. Starts of single-family homes are expected to fall 11 per cent this year, and then tick up 2 per cent next. (In May, CMHC said starts of single-family homes would fall by just 5 per cent this year).
-Sales of existing homes are expected to fall by close to 6 per cent this year. (In May CMHC was forecasting a 4 per cent drop).
-The average price of an existing home is forecast to rise by less than 1 per cent this year, and then by 1 per cent next.
-Housing starts across the Prairie provinces will fall in 2015.
-Net migration hit a record last year but is expected to decline. Job growth is also expected to moderate.
-There’s an elevated supply of condos. CMHC says builders will start focusing on selling the units that are already under way, rather than starting new projects.
-CMHC expects the resale market will become more competitive and draw some sales away from the new home market next year.
-CMHC now says 52,900 new homes will begin construction in the Prairie region this year, followed by 50,800 next year. (In May it was expecting 51,000 units this year and 50,000 next.)
-Housing starts in Alberta are forecast to rise 7 per cent to 38,600 this year, and then moderate to 36,800 next. (In May CMHC was expecting a rise of 4 per cent this year to 37,400, followed by 36,400 starts next year.)
-Housing starts in Saskatchewan are expected to fall 5 per cent to 7,900 this year, followed by 7,500 next. (In May CMHC was expecting 7,500 starts this year and 7,300 next.)
-Housing starts in Manitoba are likely to fall 14 per cent to 6,400 this year, then rise to 6,500 next. (In May CMHC was expecting 6,100 starts this year and 6,300 next.)
-Alberta will see the strongest price growth in the region, with CMHC forecasting a 4.2 per cent rise in the average resale price in the province this year to $396,800, rising to $407,000 next year. The average price in Saskatchewan is forecast to rise to $295,600 this year and $303,000 next. In Manitoba, prices are expected to rise to $266,200 this year and $273,800 next.