The Canadian Mortgage and Housing Corporation (CMHC) released its fourth quarter housing outlook last week and in part three of our four-part series we take a look at what the organization foresees for Ontario and Quebec.
Housing starts are expecting to drop in 2013 before stabilizing in 2014.
Single-family housing starts are expected to reach 23,500 in 2014 and tick up slightly in 2014 to 23,700; due, part to, to income growth and a small pool of available existing units.
“Improving income growth, low inventories of unsold homes and tighter resale market conditions for low- density housing will allow detached construction to post some modest growth over the forecast horizon, relative to higher-density housing construction,” the report stated.
Despite being home to North America’s condo capital, Ontario is expected to see multi-family housing starts slow in 2013 to 37,300 units and drop to 36,600 units in 2014. The province has seen unprecedented growth in this sector in recent years, but CMHC foresees a normalization as townhomes become more popular.
“The apartment sector has captured a growing share of new home activity in recent years, but has begun to normalize,” the report stated. “As a result, a rebalancing away from apartments toward semi-detached and row construction will occur, given more modest inventories for these dwelling types.”
Demand for homes is expected to drop in 2013 as employment and economic growth slow. However, 2014 is play host to a resurgence in the housing market as the economy strengthens.
The province’s demand for single-family homes will drop with multi-family homes expected to become more popular. 2013 is expected to see 13,300 starts and 2014 is expected to see a similar number.
Multi-family homes are still affordable in Quebec and have been embraced by a large part of the population. However, starts are expected to drop following a boom from 2010-2012.
“As a result of three years of sustained construction from 2010 to 2012, market conditions in this market have eased notably,” the report stated. “Starts of multi-family dwellings will, thus, decrease by nearly 25 per cent this year. Multiple starts will decrease below the 24,000 level in 2013 and stabilize in 2014 (23,500).”