Canada house prices to remain stable this year-CMHC
Canada, 26th August: Housing prices in Canada will show a steady trend this year and a rise will be witnessed in the coming year, Canada Mortgage and Housing Corporation has revealed.
Factors behind stability in Canada housing prices--According to deputy chief economist for CMHC (Canada Mortgage and Housing Corporation), Mathieu Laberge, Canadian housing sector will get support from immigration, mortgage rates and employment despite recent financial turmoil. So, demand for housing in Canada will remain strong this year, added Laberge.
As a result, the average MLS price will continue to hover around $367,500 while witness an increase of 1.3 percent in the year 2012 to touch $372,400.
Uncertainty is engulfing the financial market and it is yet to be seen how the things move and their effect on the real economy, stated Laberge. The outlook is a bit revised, but nonetheless, quite consistent with earlier outlook, he asserted.
Although, the report by the CMHC says housing market will see moderate gains next year while mortgage rates will stay almost flat this year, several analysts including Capital Economics suggest a downfall in Canada house prices by nearly 25 percent in the coming three years time.
Canada housing starts to remain steady next year–Housing starts throughout Canada will be steady this year, the report by CMHC shows. It further reveals a similar trend to continue next year.
There will be a marginal increase in the number of new homes to be built this year, thanks to factors like low rates of mortgage and positive employment scene outweighing risks by financial uncertainty in markets, CMHC says.
The number of housing starts predicted by CMHC in Canada during the third quarter is 183,200 units this year and 183,900 in 2012.
Growth in immigration, employment predicted for 2011, 2012--The forecast by CMHC for present house sales is said to be 446,700 units which is almost same as the previous year. And for the coming year, the prediction for home sales is 458,000 units.
A growth of 1.7 percent is predicted in employment this year as well as next year along with arrival of 245,000 new immigrants this year. These two positive factors will provide a boost to the housing demand in Canada. Meanwhile, the possibility of increase in the interest rates by Bank of Canada is quite low.