Housing starts will slip this year: CMHC
Housing starts are forecast to decline in both this year and next as high prices crimp demand, Canada Mortgage and Housing Corp. said Friday.
CMHC sees residential housing starts coming in at 215,475 units this year, down from 228,343 starts last year.
The latest CMHC forecast is slightly better than the outlook it offered in May, when it projected 214,650 units would be started in 2008.
Bob Dugan, the chief economist for CMHC said high employment levels, rising incomes and low mortgage rates will keep the housing market relatively solid this year.
"Increased competition from the existing home market, coupled with the elimination of the pent-up demand that built up during the 1990s, will exert downward pressure on housing starts, which will decline to 194,000 units in 2009 from 215,000 in 2008," he said.
Starts this year are expected to ease in seven of 10 provinces, with only Saskatchewan, Ontario and Newfound and Labrador forecast to see starts rise.
The situation will change in 2009, however, with Manitoba expected to be the only province to see higher housing starts. Manitoba's starts are forecast to dip from 2007's 5,378 units to 5,400 this year, and rise to 5,738 in 2009.
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