The Canada Mortgage and Housing Corporation (CMHC) released its second quarter 2014 Housing Market Outlook, Canada Edition, highlighting their forecasts for 2014 and 2015 housing starts, and MLS average prices and sales figures.
The CMHC expects Canadian housing starts to range between 172,300 and 189,900 units in 2014, with a point forecast of 181,100 units, which is a slight decrease compared to the 187,923 units in 2013. In 2015, the CMHC is predicting that housing starts will range between 160,600 and 203,600, with a point forecast of 182,100 units.
“Builders are expected to continue to manage their starts activity in order to ensure that demand from buyers seeking new condominium units is first channeled toward unsold completed units or unsold units that are currently under construction,” says Mathieu Laberge, Deputy Chief Economist for CMHC.
Canadian MLS sales
In 2014, the CMHC is forecasting that MLS sales will range from 428,100 to 487,700 transactions, with a point forecast of 457,900. This is a minuscule increase compared to 2013’s figure of 457,338 units. The CMHC expects sales to jump in 2015, with their forecast ranging from 441,800 to 500,400, with a point forecast of 471,100.
This jump in sales throughout 2015 may be caused by builders and developers putting more time and effort into selling existing inventory.
Average MLS price
The average MLS price for a home in Canada in 2014 is projected to range between $386,400 and $405,600. In 2015, the CMHC forecasts an average price range between $388,200 and $416,200. The point forecast for 2014 is expected to rise 3.5% to $396,000, and an additional 1.6% in 2015 to $402,200.
As housing starts decrease steadily over the next year and a half, sales and prices will increase at a healthy rate, making for a soft landing for the Canadian housing market.