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Canadas Housing Activity to Strengthen says Forcast

  May. 13th 2010 posted as General Canada's housing starts rebounded in the second half of 2009 and will strengthen in 2010, according to the first quarter Housing Market Outlook recently released by Canada Mortgage and Housing Corporation (CMHC). According to CMHC, Canadian housing markets in 2010 will benefit from improving economic conditions and low mortgage rates. As well, measures recently announced by the Government of Canada to support the long-term stability of Canada's housing market will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home.

A projected increase in new housing should ease some of the current pressure on the resale home market, which has shifted from a buyers' market, at the beginning of 2009, to a sellers' market. The relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010.

The strong pace of MLS® sales seen in the second to fourth quarters of 2009 is not likely to be sustained as pent-up demand is exhausted and financing costs increase with anticipated higher interest rates later in 2010, says CMHC. As a result, existing home sales are forecast to be in the range of 455,350 to 509,900 units in 2010, with a point forecast of 486,700 units, and then move slightly lower in 2011 to be in the range of 426,300 to 494,600 units, with a point forecast of 469,950 units.

What does all this mean to Canadian home buyers and sellers? With an improved balance between demand and supply, CMHC predicts that for most of 2010, the average MLS® price is expected to remain close to the average in the fourth quarter of 2009, and then rise modestly in 2011.

Of course, these forecasts just give an overview of the national picture. Average home prices can vary dramatically in different communities, from neighbourhood to neighbourhood and even on the very same street. Want to know more about home prices in your local community? Contact your local Coldwell Banker real estate sales representative for further information. You'll be glad you called us first.