CMHC Projects Starts Will Fall 33% in 2009

May 22, 2009

OTTAWA — The Canada Mortgage and Housing Corporation’s latest quarterly Housing Market Outlook projects housing starts will decline to 141,900 in 2009 — down from 211,056 in 2008 — before increasing to 150,300 in 2010.
“The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007,” said Bob Dugan, chief economist for the CMHC, in a press release announcing the report’s findings. “However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers; bringing housing starts more in line with demographic fundamentals over the forecast period”.
The projections fall in a forecasted range of between 125,000 and 160,000 units this year. For 2010 the range is currently pegged at between 130,000 and 180,000 units. The CMHC expects the drop in starts to be relatively uniform across segments, with both single-detached and multiple starts projected to fall by roughly a third.
Geographically, Alberta and Saskatchewan are expected to take the biggest hit in starts, with each projected to have fewer than half as many starts this year as last. Quebec is expected to be the best off of all the provinces, with only a 16 per cent decline this year.
Existing home sales, meanwhile, are expected to decline to 357,800 units in 2009 — that’s down from 433,900 units in 2008 — before rising to 386,100 units in 2010. The average Multiple Listing Service price is also expected to decrease to $283,100 in 2009 and then stabilize in 2010.

Provincial Housing Outlook
Total Housing Starts