CMHC predicts that the housing market will stabilize in 2011, and that housing starts are expected to keep reflective of ‘demographic fundamentals’ through 2011-2012.
Housing starts are forecast to be in the area of 166,600 to 192,200 units in 2011, with a point forecast of 179,500 units. In 2012, housing starts are expected to be in the range of 163,200 to 207,500 units, with a point forecast of 185,300 units.
CMHC predicts that existing home sales will be between 429,500 to 480,000 units in 2011, with a point forecast of 452,100 units. In 2012, MLS sales will move up and are expected to be in the range of 410,000 to 511,900 units, with a point forecast of 461,300 units.
The average MLS price nationally has been propped up by a buoyant property market in regions like Vancouver, where a run on luxury housing and an influx of foreign property investors has contributed to significant price appreciations.
There is expectation though, as 2011 unfolds, that MLS prices will begin to fall in line closer to stable expectations. That said, there is still an expectation that the average MLS price will increase through 2011. In 2012, they expect that the market will shift towards stability and more balanced conditions, and that price growth- while still forecast, it expected to be much more moderate.
The report says, “We expect the average MLS® price to be between $347,700 and $374,300 in 2011 and between $349,500 and $385,000 in 2012. CMHC’s point forecast for the average MLS® price is expected to move up to $361,100 in 2011, while 2012 will see a further increase to $364,200.”
Looking at different regions, CMHC expects that BC will see the smallest declines in housing starts. In 2012, they predict that the greatest increase will be in BC and in Alberta. Ontario also will see a slight decline in 2011, with positive employment and economic recovery contributing to an increase in 2012.
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