“Overall, despite the uncertainty surrounding recent oil price declines, economic conditions in Canada are forecast to remain supportive of housing demand,” the report states. “Nevertheless, housing starts are forecast to moderate, but remain relatively close to levels recorded in 2014, due to a number of factors.”
Housing starts are expected to fall within the range of 154,000 and 201,000 units in 2015 and 148,000 and 203,000 units in 2016.
“The average MLS price is forecast to be between $384,000 and $428,000 in 2015. In 2016, the average MLS price is expected to be between $388,000 and $438,000,” the report states. “The point forecasts call for a 1.5 per cent gain in 2015 and a further 1.6 per cent gain in 2016.”
However, increased housing prices in hotter markets are expected to continue to erode affordability, despite improvements to employment earnings, according to CMHC.
“In 2016, housing starts will decrease marginally in all provinces, with the exception of Quebec and British Columbia,” the report states. “Improving employment trends in Quebec and above-average economic growth in British Columbia will support increased starts activity in these provinces. Prices, as well, are expected to moderate.”
Meanwhile, rates are expected to chug along at record-lows for the foreseeable future.
What can brokers expect in the near future? CMHC released its first quarter housing market outlook Friday and in it forecasted housing start moderation in 2015 and 2016.