TORONTO Feb 6 Canada's federal housing agency
nudged up its forecast for housing starts and prices in 2014 and
said sales and construction will be steady to higher in 2015 as
an improving economy tempers the impact of rising mortgage
The view from the Canada Mortgage and Housing Corp suggests
the nation's once-roaring housing market is settling into a soft
landing, with construction moderating to more sustainable levels
and sales and prices ticking slowly higher.
The CMHC said on Thursday housing starts will be in a range
of 176,600 and 199,800 in 2014, with a point forecast, or most
likely outcome, of 187,300 units, relatively unchanged from
187,923 units in 2013. That is up slightly from CMHC's October
estimate of 184,700 starts.
The agency said there will be 163,200 to 206,600 units
started in 2015, with a point forecast of 184,900.
Both forecasts represent a sharp slowdown from the 214,827
starts of 2012, when the market was at record highs and the
government intervened to tighten mortgage lending rules.
Canada sidestepped the worst of the financial crisis of the
last decade because it avoided the real estate excesses of its
U.S. neighbor, and a post-recession housing boom helped it
recover more quickly than its Group of Seven peers.
But the housing market began to cool in mid-2012 after the
country's Conservative government, worried about a potential
property bubble, tightened mortgage rules. Demand fueled a
strong rebound in 2013, and economists are largely predicting a
softer but stable market this year.
The CMHC forecasts see homebuilding and sales leveling off,
with prices continuing to notch small gains.
CMHC said existing home sales will range from 436,000 to
497,000 in 2014, with a point forecast of 466,500 units. That's
down slightly from October's forecast of 468,200 but up from
457,485 in 2013.
For 2015, it expects a move up to a range of 443,400 to
506,000, with an increase in the point forecast to 474,700.
Price gains are expected to slow in 2014 and 2015. CMHC's
point forecast for the average price calls for a 2.1 percent
gain to C$390,400 ($351,600) in 2014, and a 1.7 percent gain to
C$397,100 in 2015.