Thursday, September 3, 2009

Canadian Housing on the Brink of Rebound

Reprinted courtesy of The Globe and Mail

Housing starts are expected to pick up in the second half of this year as buyers shake off some of their anxiety about the economy, Canada Mortgage and Housing Corp. said on Thursday.

The housing agency said in a forecast that housing starts are expected to reach 141,900 this year and 150,000 next year. This marks an improvement, although the activity is still well down from the 211,056 starts in 2008, when Canada was coming off a prolonged housing boom.

“Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year,” Bob Dugan, CMHC chief economist, said.

“In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen,” he said in a forecast that essentially confirmed earlier CMHC projections.

Read CMHC's report

Improving activity on the resale market and lower inventory levels in both the new- and existing-home markets should prompt builders to increase residential construction, CMHC says.

“Existing home sales, as measured by the Multiple Listing Service, have rebounded strongly since January and will reach 420,700 units in 2009 and remain close to that level at 419,000 units in 2010,” CMHC said.

“The average … price is expected to moderate to $301,400 in 2009 and to increase to $306,300 in 2010,” CMHC said.

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