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Related Links: National Archive 2003 Archive January 2003 February 2003 March 2003 April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003    |
 
Home Starts Expected to be Second Strongest in 14 Years, Renovation Spending to Hit New RecordsOTTAWA, Ontario, August 13, 2003 — Housing starts are expected to reach 203,200 units this year, the second highest housing starts level in 14 years and renovation spending will rise to $32.1 billion, according to Canada Mortgage and Housing Corporation's (CMHC) third quarter CMHC Housing Outlook, National Edition report. "Another solid year for home construction is expected for 2003 but the pace of new construction will ease over the remainder of the year," said Bob Dugan, Chief Economist at CMHC. "Greater availability of existing homes on the resale market along with slightly higher mortgage rates will lead to a further reduction in new home construction in 2004 when starts are expected to reach just over 188,000 units." "While low interest rates and strong employment growth have supported strong demand for housing, sales of existing homes will fall slightly short of last year's record pace reflecting slower economic growth. Increases in the average resale price of homes will continue to outpace the general rate of inflation. However, as sales edge lower relative to the supply of new listings coming on the market, growth in house prices will moderate from the 2002 pace. The average price of existing homes will increase by 7.4 per cent this year and 4.4 per cent in 2004." "On the renovation front, active existing home markets and more disposable income mean an increase in renovation spending which will rise from $29.8 billion last year to record levels of $32.1 billion in 2003 and $33.5 billion in 2004. British Columbia and Quebec will lead the growth in renovation spending throughout this year, and well into 2004," added Dugan. Housing starts in British Columbia will rise again this year as home market conditions improve, and will continue in 2004 with the province expected to have the highest percentage growth in housing starts nationally in 2003-2004. Residential construction peaked last year in Ontario. Though lower, home starts will remain robust this year and next because of low inventories of newly completed and unoccupied homes, employment gains and low mortgage rates. Multiple family home starts will be strong this year, especially condominiums in the increasingly expensive home markets such as Toronto. Lower but solid migration will nudge starts down in 2004. Quebec's housing starts will peak this year, as high consumer confidence, continued strength in the labour market and rising disposable income boosts demand for new homes. Home construction will be slightly lower in 2004. In the Prairies, lower in-migration will cause starts to decline this year after solid growth in 2002. Fewer starts will continue into 2004 in Saskatchewan and Alberta. Manitoba starts will remain stable. Following large gains in much of the Atlantic region over the past two years, soft labour market conditions will slow the housing demand and starts will begin to slow this year and in 2004. Information on this release:
SOURCE: CMHC Housing Outlook, National Edition, Third Quarter 2003.
Source: Statistics Canada, CMHC forecast 2003 and 2004. News source: Canada Mortgage and Housing Corporation (CMHC)
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