The Canada Mortgage and Housing Corporation (CMHC) released their second quarter Housing Market Outlook report for 2014 and their predictions for the year ahead are pretty much in line with the forecast they published in late 2013: expect softer starts and small price increases.
“Builders are expected to continue to manage their starts activity in order to ensure that demand from buyers seeking new condominium units is first channeled toward unsold completed units or unsold units that are currently under construction,” said Mathieu Laberge, Deputy Chief Economist for CMHC, in the news release.
On an annual basis, housing starts are expected to range between 172,300 and 189,900 units in 2014, with a point forecast of 181,100 units, down from 187,923 units in 2013. In 2015, housing starts are expected to range from 160,600 to 203,600 units, with a point forecast of 182,100 units.
MLS sales are expected to range between 428,100 and 487,700 units in 2014, with a point forecast of 457,900 units – not much of a shake-up from the 457,338 transaction counted in 2013. In 2015, sales are expected to range from 441,800 to 500,400 units, with an increase in the point forecast to 471,100 units.
The CMHC adjusted its earlier price predictions. It’s currently forecasting the average MLS price will sit between $386,400 and $405,600 in 2014. In late 2013, the suggested the average for 2014 would be between $380,100 and $400,700.
The point forecast for the average MLS price is currently expected to see a 3.5 per cent gain to $396,000 in 2014, a slight step up from their earlier predication of a 2.1 per cent gain to $390,400 in 2014.
Further into the future, the average price in 2015 is expected to fall between $388,200 and $416,200 in 2015. That’s a boost from the CMHC’s earlier forecast, which pegged the average between $384,300 and $409,900. As for the point forecast for the average MLS price in 2015, the agency sees a 1.6 per cent gain to $402,200 in 2015. Late last year, the CMHC had a lower prediction, believing there would be a 1.7 per cent gain to $397,100 in 2015.