Canadian Housing Starts Will Fall Less Than Prior Expectations
In a report released today the Canada Mortgage and Housing Corp., a national housing agency, said Canadian home construction will moderate less this year than had been previously forecast but will continue to decline into 2009.
The agency is now forecasting a decline in new construction to approximately 215.5K units up from 214.6 units forecast in May but down from last year’s 228.3K units. The decline according to the report is still due to higher mortgage carrying costs. However the overall picture is still healthy.
“Strong economic fundamentals such as continuing high employment levels, rising incomes and low mortgage rates will provide a solid foundation for healthy housing markets this year,” wrote Bob Dugan, Chief Economist for CMHC in the report. “Increased competition from the existing home market, coupled with the elimination of the pent-up demand that built up during the 1990s, will exert downward pressure on housing starts, which will decline to 194,000 units in 2009 from 215,000 in 2008.”