March 3, 2010
While the housing market will continue its momentum through until the summer, it will finally have some air taken out of its tires in the latter half of 2010, the CMHC predicts. The causes?
Higher mortgage carrying costs, which just means interest rates will likely go up as the Bank of Canada tries to curb inflationary pressures, and an increase in supply as developers will be less reticent about investment and resale sellers will see prices have leveled off and finally put their homes on the market.
The CMHC predicts that the average house price will hit an all-time high of $430 000.
But wait– there’s more! The CMHC has predicted that in 2011:
…existing home sales will drop to 83,000 units, falling by 9.3 per cent compared with 2010, while the new-home market is expected to drop by 10.1 per cent. Yourhome.ca
Despite these seemingly bleak figures for 2011, the CMHC still expects prices to climb further to $439 755. But, keep in mind, that 2.5% growth is basically cancelled out by inflation.
So enjoy for now, sellers, but keep in mind that post- HST and record-low interest rate era, prices are going to start leveling off and demand is likely going to decrease.