Construction of new homes in Canada was higher than expected in 2012, but is expected to slow in 2013 according to a forecast released today by the Canadian Mortgage and Housing Corporation.
The CMHC’s fourth quarter 2012 outlook also noted that resales of existing homes should remain steady. This is expected to lead to house price growth that is roughly in step with or slightly below inflation.
Housing starts appeared to slow in September, but through a significant chunk of 2012 economists have been surprised by the number of starts. The high number has been attributed to the large number of condos being built.
“A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year,” Mathieu Laberge, deputy chief economist at CMHC, explained in a press release.
“Nevertheless, employment growth and net migration will help support housing starts activity going forward.”
Here are a few more essential points from the CMHC’s quarterly report:
- The CMHC forecasts that there will be 193,600 housing starts in 2013 and estimates that the 2012 number will total 213,700
- The CMHC forecasts there will be 461,500 resales in 2013 and 457,400 by the year end of 2012
- Total starts in 2013 are expected to decline as a result of lower multi-family starts
- Resales are expected to rise due to employment growth and low interest rates