Housing Activity Will Slow in 2002 But Pick Up in 2003

OTTAWA, Ontario, March 12, 2002 — Housing starts in Canada are expected to reach 156,100 units this year and 159,200 in 2003, compared with 162,733 in 2001, according to Canada Mortgage and Housing Corporation's (CMHC) first quarter CMHC Housing Outlook, National Edition report.

"2002's small decline in housing starts, will be tied to weak job growth in 2001 and this year," said Michel Laurence, Senior Advisor of Economic and Housing Analysis at CMHC. "Construction will remain robust however, due to high migration, continued low mortgage rates and higher house prices. 2003 will see more starts due to a stronger economy."

"Weak job growth will mean fewer MLS sales this year but, an improving economy will nudge sales higher in 2003. Average resale price growth is expected to slow to about two or three per cent over the next two years as sales moderate relative to the number of listings on the market."

Housing starts will fall in Ontario and Quebec this year due mainly to slower economic growth. Low rental vacancy rates however, combined with a limited number of properties for resale, will help keep housing starts in 2002 close to 2000's levels.

British Columbia housing starts will increase, relative to a low level in 2001, as housing market conditions improve. Low interest and mortgage rates are stimulating demand and supply, particularly in Vancouver`s multiple sector.

With the Alberta job market performing better than the national average, that province will remain the destination of choice for interprovincial migrants with housing demand remaining high over the forecast period. Housing construction in Manitoba and Saskatchewan will be sustained in part by tight resale markets.

Following large gains over the past two years, starts in the Atlantic provinces will drop this year and remain low in 2003, in line with a weak job market.

For further information contact:

Michel Laurence
CMHC
(613) 748-2737
mlaurenc@cmhc-schl.gc.ca