Housing starts are expected to range between 179,300 to 190,600 units in 2013, with a point forecast of 185,000 units, down from 214,827 units in 2012. In 2014, housing starts are expected to range from 163,700 to 205,700 units, with a point forecast of 184,700 units.
How do the new numbers compare to the earlier forecast? The CMHC was slightly more conservative in their estimate for 2013, suggesting starts would range between 177,100 to 188,500 units in 2013 back in August, with a point forecast of 182,800 units. However, the agency’s latest forecast for 2014 was lower than their previous prediction which suggested starts would range between 165,600 to 207,600 units, with a point forecast of 186,600 units in 2014.
“In the new home market, builders are nevertheless expected to limit the number of housing starts while inventories of unabsorbed units, completed and under construction, are drawn down,” said Mathieu Laberge, Deputy Chief Economist for CMHC, in the news release.
“In the resale market, home buyers have been motivated to advance their purchases and lock-in pre-qualified mortgages given the recent moderate increase in mortgage rates. It is expected that existing home sales will increase modestly in 2014 with improving economic conditions.”
MLS sales are expected to range between 439,400 to 474,000 units in 2013, with a point forecast of 456,700 units, about equal with the 454,005 in 2012. In 2014, sales are believed to range from 438,300 to 498,100 units, with an increase in the point forecast to 468,200 units.
The average MLS price is expected to be between $372,300 and $383,700 in 2013 and between $374,100 and $396,300 in 2014.
The CMHC’s latest predictions tend to favour 2013 over the year ahead. Back in August, the CMHC’s point forecast for the average MLS price was listed as a 2.7 per cent gain to $374,800 in 2013 – the new numbers predict a 4.0 per cent gain to $378,000 in 2013. For 2014, the August forecast suggested there would be a 2.1 per cent increase to $382,800 in 2014, while the CMHC now changed its tune to predict a 1.9 per cent gain to $385,200 in 2014.