CMHC today said in its Housing Market Outlook that the Canadian housing start will decline in 2013.
The reasons for the decline are – weak economic fundamentals and moderation in economic and employment growth. Another factor responsible for lower than usual first time buyers is the slowing growth of 25-34 year age group this year in Ontario, Quebec and the Atlantic region.
The agency also expects the existing home sales to decline in 2013. As a result the home price appreciation will be at per with inflation. This actually means that there will be no price gain this year – after inflation adjustment.
If, in 2014 economic and employment situation improves then the agency is hopeful that we shall see some positive numbers in resale and new starts.
It expects a slow and gradual increase in the mortgage rates but does not forecast any significant change in 2014. It does not see any change in the overall interest rate situation till mid-2014.
The only sector that is expected to remain stable is rental.