According to the latest forecasts conducted by Canada Mortgage and Housing Corporation (CMHC), relatively slow economic and
employment growth will reduce demand of existing and new homes this year. Easing resale markets and relatively high inventories of new dwellings will significantly lower housing starts in 2013.
" Nonetheless, demographic trends will support housing demand into 2014, at which time a strengthening economy and tightening resale markets will energize both the resale and new housing markets," said Kevin Hughes, CMHC Regional economist for the province of Quebec
In 2013, moderate job growth, the continued easing of the resale market, which is expected to attract a greater part of housing demand, and the trend toward multifamily dwelling will contribute to reduce single starts and translate into a total of 13,700 singldetached homes started. In 2014, a tighter resale market will bring some support to the new housing market segment, which is expected to result in 14,100 single starts.
The trend toward the multi-family market segment is explained by its relative affordability, the changing needs of an aging population and by densification trends. Fuelled by the popularity of condominium apartments, supply in this market segment has increased significantly. As a result of three years of sustained construction from 2010 to 2012, market conditions in this market have eased significantly. Starts of multifamily dwellings will thus decrease considerably this year. Multiple starts will descend below the 25,000 level in 2013 and rise to the 25,700 mark in 2014.
While holding steady in 2012, sales recorded by Centris® have been recently declining as a result of the overall economic context discussed previously. Despite a certain rebound expected in the second half of this year, resales will come in at a lower level this year. For 2013, 73,000 such transactions are forecast. As buying conditions improve, total resales will be back in growth mode next year. In total, 75,700 Centris® sales are forecast for 2014.
Relatively lower demand for resale homes, combined with rising supply, has taken pressure off price growth in recent quarters and should continue to do so throughout this coming year. With a return to more balanced conditions, price growth in the resale market will continue to moderate in 2013. The average price recorded by Centris® will reach $269,100 in 2013 and $272,000 next year.