Developers are finally poised to slacken their pace, and while that may be good news for markets already swimming in condo construction, brokers may have less to celebrate.
“Overall, housing starts are projected to remain somewhat stable, at 187,300 units in 2014," CMHC states in its first quarter housing outlook. "In 2015, housing starts are expected to moderate to 184,900 units.”
There are currently a great number of housing developments currently under construction and builders are expected to pull back on starting new builds until demand is met," the report states. "A spike in rates over the course of the year is also expected to affect the market going into 2015.
“The expectation of modest and gradual increases in mortgage rates toward the end of the forecast horizon will also contribute to tempering demand,” the report states. “This, combined with a slowdown in the growth of the pool of first-time buyers in late 2014 and into 2015, will lead to further moderation of housing starts next year.”
The trend is expected to carry on, with housing starts slowly declining following a construction boom two years ago.
“Even with modest improvements in economic conditions in the latter half of 2013, slower employment and income growth in the first half of the year led to more modest housing demand overall,” CMHC states. “As a result, housing starts slowed to a total of 187,923 units in 2013 from 214,827 units in 2012.”