Canadian Mortgage News

January 2003 National News Archive

Housing Starts will Surpass 200,000 Units in 2003

OTTAWA, Ontario, May 14, 2003 — Housing starts in Canada are expected to reach 205,500 units this year, according to Canada Mortgage and Housing Corporation's (CMHC) second quarter CMHC Housing Outlook, National Edition report.

"Continued employment and income growth will sustain current housing market expansion throughout this year," said David Weingarden, Senior Economist at CMHC. "Construction will remain strong into 2004, with housing starts reaching approximately 193,000 units. The slight decline in 2004 starts will be due in part to expected mortgage rate increases.

"A steady economy will mean only a slight dip from last year's record high MLS® existing homes sales. Rising mortgage rates later this year and next, and higher house prices will mean fewer sales in 2004. As sales moderate, relative to the number of listings on the market, average resale price growth is expected to slow to 5.3 per cent this year and 4.9 per cent in 2004.

"Over the medium term (2005-2007), housing starts will decline, with levels around 180,000 in 2007," added Weingarden.

As market conditions improve in British Columbia, starts will rise again this year. This will continue in 2004 with BC expected to have the highest percentage growth in housing starts nationally in 2003-2004.

Ontario starts will also be higher this year due to continued strength in the provincial economy and the labour market. Multiples in particular will be strong this year, especially in Toronto. Lower migration will dampen starts in 2004.

In Quebec, housing starts will be slightly higher this year, as the market remains active due to pent up demand and strong economy. The market will plateau later this year after surging over 50 per cent in 2002. The market will continue to cool in 2004.

In the Prairies, weaker employment prospects, combined with lower migration, will cause starts to decline this year after solid growth in 2002. This trend will continue into 2004 and will mean fewer starts in Saskatchewan and Alberta. Manitoba starts will remain stable.

Following large gains in much of the Atlantic region over the past two years, starts will weaken this year and continue lower in 2004. Softer economic and employment conditions will slow housing demand.

Information on this release:

David Weingarden
CMHC
(613) 748-2354
dweingar@cmhc-schl.gc.ca

SOURCE: CMHC Housing Outlook, National Edition, Second Quarter 2003.
* Rounded off to the nearest hundred.
** The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Data is for 10 provinces.

News source: Canada Mortgage and Housing Corporation (CMHC)