OTTAWA, Feb. 4 /CNW Telbec/ - Housing starts reached 228,343 units in 2007, an increase of 0.4 per cent from 227,395 in 2006, according to Canada Mortgage and Housing Corporation's (CMHC) first quarter Housing Market Outlook, Canada Edition report. In 2008, residential construction will decline
to about 211,700 units, given higher mortgage carrying costs. Nevertheless, Canada's housing market remains strong and 2008 will mark the seventh
consecutive year in which housing starts exceed 200,000 units. "Despite some global financial instability with regards to the U.S. housing market, Canada continues to experience robust employment levels, ongoing income gains and low mortgage rates," said Bob Dugan, Chief Economist
for CMHC. "This has strongly supported Canada's housing markets. However, housing starts are expected to decrease in 2008 mainly due to recent increases in house prices, which will push mortgage carrying costs higher for home buyers."
Existing home sales, as measured by the Multiple Listing Service (MLS(R))(1), are poised to experience a very strong year with about 520,000 units in 2007, a 7.6 per cent increase over 2006. In 2008 the level of MLS(R) sales is expected to fall by 3.9 per cent to 499,650 units, while 2009 will see an additional decrease to 488,300. Growth in the average MLS(R) price has remained high at 10.6 per cent in 2007, mainly because of continued strong price pressures in Canada's western provinces. However, as most resale markets move toward more balanced conditions, growth in average MLS(R) price is forecast to slow to 5.2 per cent in 2008 and 3.8 per cent in 2009. At the provincial level, British Columbia's housing starts, which have been above historical averages, are expected to decline in 2008. It is anticipated that a continuing tight labour market, robust income growth and high levels of consumer confidence will help to offset the dampening effect of rising mortgage carrying costs on the demand for new and existing homes in British Columbia. Housing starts should decline from 39,195 units in 2007 to 33,250 in 2008 and 31,700 in 2009. The average MLS(R) price in British Columbia will grow by 12.1 per cent in 2007, 6.0 per cent in 2008 and 5.0 per cent in 2009. This moderation is due to increased listings and fewer resales bringing more balanced supply and demand conditions to existing homes.