Housing starts in Barrie and across Canada are expected to dip in 2008 (information from Ontario Real Estate Association)
November 12, 2007 — New home construction will drop in 2008 in part due to higher housing prices and mortgage carrying costs. That’s the word from Canada Mortgage and Housing Corporation’s (CMHC) fourth quarter Housing Market Outlook, Canada Edition report.
Housing starts will reach 227,530 units in 2007, an increase of 0.1 per cent from the 227,395 units in 2006, according to the report. However, in 2008, residential construction will decline to about 214,000 units. Despite this drop, 2008 will mark the seventh consecutive year in which housing starts exceed 200,000 units.
“Continuing high employment levels, income gains and low mortgage rates have been a boon to Canada’s housing markets. Despite this, however, housing starts are expected to decrease in 2008,” said Bob Dugan, Chief Economist at CMHC. “The pull back in housing starts next year will be mainly due to the increases in house prices in recent years, which have pushed mortgage carrying costs higher.”
Existing home sales, as measured by the Multiple Listing Service (MLS®), are poised to experience their best year on record with just over 521,000 units in 2007, a 7.8 per cent increase over 2006. The high level of MLS® sales will be led by activity in the Prairies. With respect to 2008, the level of MLS® sales will fall by 3.9 per cent, but will still be slightly over 500,000 units, the second highest on record. Growth in the average MLS® price will remain high at 10.1 percent in 2007, mainly because of continued strong price pressures in Canada’s western provinces. As most resale markets move toward more balanced conditions, growth in average MLS® price is forecast to slow to 4.2 percent in 2008.
The Ontario economy is expected to improve slightly heading into 2008. Accordingly, this will help sustain a high level of housing demand across the province. New home construction activity will be moderate between now and the end of 2008. Housing starts are expected to decline from 73,417 units in 2006 to 67,700 units in 2007. For 2008, a slight up-tick to 68,175 units is expected. The average MLS® price in Ontario will rise by 6.2 per cent in 2007, while 2008 should see a more modest increase of 3.3 percent.
As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on over 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.
Provincial Housing Outlook: Total Housing Starts
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| 2006 | 2007 | 2008 |
| Newfoundland and Labrador | 2,234 | 2,325 | 2,250 |
| Prince Edward Island | 738 | 680 | 630 |
| Nova Scotia | 4,896 | 4,700 | 4,525 |
| New Brunswick | 4,085 | 4,025 | 3,725 |
| Quebec | 47,877 | 52,400 | 48,420 |
| Ontario | 73,417 | 67,700 | 68,175 |
| Manitoba | 5,028 | 5,750 | 5,600 |
| Saskatchewan | 3,715 | 6,000 | 5,500 |
| Alberta | 48,962 | 47,750 | 42,250 |
| British Columbia | 36,443 | 36,200 | 33,250 |
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