After several years of booming residential construction in Canada, it looks like new housing starts are finally starting to cool – but just slightly. According to Canada Mortgage and Housing Corporation (CMHC), residential construction will decline in 2008 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.
As most real estate industry insiders will tell you, today’s new housing starts are a very good indicator of future buyer demand, and the state of the market overall. The good news is that CMHC, Canada’s national housing authority, predicts that despite some global financial instability, Canada’s robust employment levels, ongoing income gains and low mortgage rates will continue to support a strong housing market. However, even with our solid economic footing, 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.
Meanwhile, resale homes, as measured by the Multiple Listing Service (MLS®), are poised to experience another good year. After a very strong showing in 2007, with about 520,000 units representing a 7.6% increase over the previous year, the number of transactions is expected to slow this year, but will still edge the 500,000 mark. In 2008 the number of MLS® sales is expected to fall by 3.9% to 499,650 transactions, while 2009 will see an additional decrease to 488,300 as most resale markets move toward more balanced conditions.
While there’s expected to be a gradual slowing in the number of sales, there’s still good news for Canadian home sellers. Growth in the average MLS® price will continue, although at not as strong a pace as seen in 2007. CMHC forecasts that Canada’s average MLS® price will grow by a healthy 5.2% in 2008 and another 3.8% in 2009.
That’s the ‘big picture’ in terms of the national forecast for this year. Of course, the real news is what’s happening in your own area. That’s where your local Coldwell Banker® real estate professional comes in. They have their finger on the pulse of your local community, and can tell you what’s selling – and what’s not – in your community, in your neighbourhood, and even on your own street. Why not give them a call and find out how the national trend applies in your market and what’s in store for 2008. It could be the best call you’ll ever make! Contact: Maureen Reed, sales representative, office: 416-231-5000 or direct at: 416-895-4883, www.resalehomes.name