Canada Mortgage and Housing Corporation releases 2016-17 forecast.
Housing markets across Canada will “moderate” in 2016 and 2017, according to the Canada Mortgage and Housing Corporation’s latest forecast. The growth in prices for homes is also expected to slow down next year and the market will favour moderately-priced homes.
CMHC says there has been a slowdown in home building and home sales in oil-producing provinces, especially Alberta, but this slowdown did not cause major market disruptions.
“In 2015, increased housing market activity in provinces like Ontario and British Columbia - provinces that have benefitted from declining energy prices, a lower Canadian dollar and continued low mortgage rates - offset slowdowns,” said Bob Dugan, CMHC Chief Economist.
“We expect, however, that this counterbalancing effect will decrease over time. As such, housing starts and MLS sales are projected to moderate in 2016 and 2017."
CMHC also says the housing market will “moderate” because of the high number of apartment and condo buildings currently on the market or being built. These projects typically take longer to build than detached homes, and the Corporation says Canada could see the number of completed but unsold units pile up. CMHC says that increasing number will mean builders start to focus their energy on selling those apartments and condos, rather than building new homes and buildings.
Here’s a break down of the forecasted sales numbers for Canada, according to CMHC:
MLS sales for 2016: 425,000 - 534,000 units
MLS sales for 2017: 416,000 - 536,000 units
Compare this to the updated 2015 forecast - 444,000 - 546,000 units this year
And here’s a look at CMHC’s forecasted prices for Canada:
Average price on the MLS for 2016: $420,000 - $466,000
Average price on the MLS for 2017: $424,000 - $475,000
Compare this to the updated average price forecast for 2015 - $417,000 - $459,000
Those price forecasts show some solid gains this year: a price climb of 7.2 per cent across Canada in 2015. Don’t expect those kind of gains next year though, says CMHC. Its forecast shows a moderate 1.3 per cent increase in prices next year and a climb of another 1.4 per cent in 2017.
As for new builds, CMHC is forecasting 153,000 - 203,000 units next year and another 149,000 - 199,000 housing starts in 2017. That’s a slight dip from the updated 2015 forecast: 162,000 - 212,000 units this year.
Want to know more? Read CMHC’s yearly forecast here.
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