Tuesday, May 27, 2008

CMHC reports Housing starts will begin to trend lower in 2008

Housing starts will begin to trend lower in 2008

Despite positive economic fundamentals,
housing activity will continue
to trend down over the next
year and a half. Most of the pent-up
demand that built up during the
1990s has now been fulfilled and
residential construction activity will
gradually move in line with Canadian
demographic fundamentals. Higher
home prices and the resulting
increase in mortgage carrying costs
will temper homeownership demand,
particularly in western provinces.
Competition from the existing
home market will increase as housing
markets move toward balanced
conditions, giving homebuyers more
choice. This, in turn, will dampen
spillover demand from the existing
market into the new home market.
These trends will dampen new
home construction. The number of
starts is expected to decrease to
214,650 units in 2008 and 199,900
units in 2009.

Interesting news from CMHC!

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