* Annual housing starts seen at 190,000 over next 2 yrs
* Oversupply of condos weighs on market
TORONTO, March 13 New home construction in
Canada is expected to slow mildly over the next two years, the
Conference Board of Canada said on Tuesday, in another sign of a
cooling housing market.
The independent research organization's latest report
forecast housing starts will be 190,000 units in both 2012 and
2013. There were 194,000 starts last year, according to Canadian
Real Estate Association (CREA) data.
Starts were seen rebounding to 200,000 units in 2014.
"The industry is coming in for a soft landing," the
Conference Board's senior economist, Maxim Armstrong, said in a
statement. "Slow job growth, still-weak consumer confidence and
high household debt loads are slowing demand for new homes."
Employment data last week showed the economy unexpectedly
lost 2,800 jobs in February despite signs of a healthy domestic
The slowdown in construction reflects an oversupply of
condominiums in some markets where demand remains tilted towards
single-family homes, the report said. Vancouver and Toronto
accounted for about 30 percent of the unsold condos over the
last six months, Armstrong said.
The forecast was in line with recent reports by CREA and
Bank of Nova Scotia that anticipated home sales would be flat
over the next two years.
In a Reuters survey last month, 10 of 14 economists and
strategists expected home prices to stall, with a mere 0.1
percent rise this year, and the same in 2013.
However, data last week by the Canada Mortgage and Housing
Corp showed housing starts rose in February from the previous
month as a significant increase in multiple-unit construction in
Quebec boosted the national number.
Despite the cooling in starts, industry profits are forecast
to climb more than 21 percent this year to C$3.4 billion ($3.42
billion) as building costs decline, the board said.
"While there may be concerns about overheating in some
segments in a few cities, the overall outlook for the housing
market in Canada remains solid," Armstrong said.