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Provincial Differences in the Canadian Housing Market

May 26, 2015

According to the Housing Market Outlook – Canada Edition, the Canadian housing market looks to remain stable with minimal change in 2015 and 2016.

While the records show stability, there are always a numerous amount of risks and vulnerabilities that affect the market outlook in each province. CMHC has produced forecast ranges for new home markets and resale to deal with these risks and vulnerabilities.

Chief Economist for CMHC, Bob Dugan, commented:

“Lower oil prices are contributing to disparities between provincial housing markets. A slowdown in housing starts and resale transactions in oil-producing provinces such as Alberta will be partly offset by increased housing market activity in other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates.”

Annually, housing starts are said to range between 166,540 – 188,580 units with a point forecast of 181,618 units in 2015. For 2016, housing starts range between 162,840 – 190,830 units with a range forecast of 181,800 units.

MLS®2 sales are anticipated to range from 437,100 – 494,500 units in 2015, with a point forecast of 475,400 units. In 2016, MLS® sales are presumed to range between 424,500 – 491,300 units, with a point forecast of 469,000 units. The average MLS® price is forecast to be between $402,139 – $439,589 in 2015, with a point forecast of $422,129. Meanwhile in 2016, the average MLS® price is forecast to be between $398,191 – $457,200, with a point forecast of $428,325.

The rate of price growth seems to be slowing down gradually because of changes in the composition of MLS® sales recorded on moderately priced homes. There is a high downside risk than upside risk due to our assessment of the most recent decline in oil prices.

CMHC is Canada’s authority on housing that helps with the stability of the financial system and housing market. It also provides support for Canadians in housing need, and offers objective housing research and information to anyone who is inclined.