New home construction across Canada will moderate from historically high levels, to reach just under 178,000 units in 2009, a level that is consistent with demographic fundamentals, according to Canada Mortgage and Housing Corporation’s fourth quarter Housing Market Outlook, Canada Edition report.
“Through the next five years, Manitoba home builders will experience the most consistent demand in Canada,” according to the CMHC report.
“By 2012, housing starts will surpass 5,000 units for the seventh consecutive year.”
According to the report, net migration will be a driving force in Manitoba’s new home construction as will international immigration. Other factors are a strong economy and a low unemployment rate.
“These factors will boost population growth and household formation, in turn supporting new home demand,” according to the report.
“High employment levels, rising incomes and low mortgage rates have continued to provide a solid foundation for healthy housing markets (in Canada) this year,” said Bob Dugan, chief economist for CMHC. “Housing starts will moderate to 212,200 units in 2008 and 177,975 units in 2009.”
Existing home sales, as measured by the Multiple Listing Service®, which reached a record level of 523,701 sales in 2007, will moderate in 2008 to 452,225 units, according to the
report.
On the other hand, the report forecasts sales will decline slightly in Manitoba in 2008 due to a severe shortage of MLS® listings, but more listings will come on the market, facilitating record numbers of sales in 2009.
The WinnipegREALTORS® Association is already reporting listings gains relative to 2007. The association reported that by the end of October MLS® listings were up 10 per cent year-over-year. During October, 981 new listings were added to the market, resulting in an overall 3,100 listings available for sale.
In 2009 across Canada, MLS® sales will climb to 433,375 units. Despite a moderation in MLS® sales, demand for existing homes will remain strong by historical standards. With housing markets having become balanced across Canada, the rate of growth in the average MLS® price will moderate. Average prices will reach $306,500 in 2008 and $306,700 in 2009.
In Manitoba, the CMHC report forecasts the listings shortage will result in double-digit price gains by the end of 2008 for the sixth consecutive year.
“An increased selection of homes for sale will lead to more balanced market conditions in 2009, resulting in a modest price gain of 3.4 per cent,” according to the report.
“Expect the average resale price to reach $190,000 next year.”