Housing starts down, and will keep falling: CMHC

Fewer basements dug, less concrete poured, and far fewer bricks were laid in Canada in 2008 than in 2007.

Canada Mortgage and Housing Corp. says housing starts fell 7.5 per cent to about 211,056 units in 2008. And that’s just the beginning. The agency forecasts sharply lower levels of starts for the next two years, along with sliding home sales.

2008 (Actual) 2009 (Forecast) 2010 (Forecast) Nfld. and Lab. 3,261 2,675 2,775PEI712 575 625

Nova Scotia

3,982 3,675 3,900New Brunswick4,274 3,475 3,650Quebec 47,901 40,700 40,500Ontario 75,076 58,255 59,700Manitoba 5,537 4,748 5,000Sask. 6,828 4,141 4,500 Alberta 29,164 19,200 22,000 B.C. 34,321 22,800 20,700 Source: CMHC

CMHC says housing starts are expected to be about 160,250 for 2009 and about 163,350 for 2010, before things pick up again.

CMHC also says existing home sales, as measured by the Multiple Listing Service, are expected to decline 14.6 per cent during 2009 to 370,500 units. It expects a 9.3 per cent increase in 2010 to 405,000 units.

Along with the decline in building, expect declines in price.

CMHC sees the average MLS price to be $287,900 for 2009, a decline of 5.2 per cent, while 2010 will see little change from 2009 average prices.

"Housing market activity will begin to strengthen as the Canadian economy rebounds in 2010 and the level of housing starts over the forecast period will be more in line with demographic fundamentals," said Bob Dugan, chief economist for CMHC.