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May 30 CMHC: Look for Higher Home Prices in 2014

Posted by: MonsterMortgage.ca

Prices look to head higher in 2014 says national Canadian corporation

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:

  • Mortgage Rates: Rates are expected to remain at historically low standards
  • Employment & Income: Income is expected to increase ‘modestly’ while employment increases are pegged at 1.2% in 2014 and 1.9% in 2015.
  • Immigration: Canada is expected to remain above historical averages as the country continues to attract new comers to the country. Higher immigration numbers are expected to support the housing market.

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