The CMHC, Canadian Mortgage and Housing Corporation indicated that they believe the hot Canadian real estate will soon encounter a ‘soft landing’ lead by moderation in housing starts and softer increases in home resale prices.
According to the CMHC, they forecast housing starts to reach 181,100 units in 2014 and 182,100 units in 2015. The CMHC expects modest increases in employment and household disposable income to continue to support housing demand. The report also references the need for builders to manage their inventories, especially after the Canadian market saw such high build numbers, particularly in condominiums, the past few years.
Resale prices are expected to climb in both 2014 and 2015 according to the CMHC. The average resale price in the MLS (Multiple Listings Service) platform is expected to reach $396,000 in 2014, representing an increase of 3.5%. In 2015, resale prices are expected to reach $402,000, representing a 1.6% price increase from the year prior.
Canada Mortgage and Housing Corp indicate that a collapse to the hot Canadian real estate market is not in the cards, but rather, a ‘soft’ landing is due.
The CMHC report also offers insights into the following key factors surrounding the Canadian housing and real-estate market: