OTTAWA — Lower crude prices are expected to help contribute to a split in the Canadian housing market that will see oil-producing provinces slow but others gain ground, Canada Mortgage and Housing Corp. said Monday.
The federal agency predicted the overall pace of housing starts will slow slightly this year and next, but that there would be regional differences.
“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,” CMHC chief economist Bob Dugan said in a statement.
“Moreover, since the inventory of completed and unabsorbed units remains above the historical average, we expect the pace of new home construction to moderate over the next couple of years as builders focus on managing the existing inventory.”
CMHC’s second-quarter forecast calls for between 166,540 and 188,580 housing starts this year and between 162,840 and 190,930 in 2016.
That compared with a first-quarter outlook for housing starts to range between 154,000 and 201,000 units in 2015 and from 148,000 to 203,000 units the following year.
Regionally, Alberta is expected to see a 13.8 per cent drop in housing starts, while Saskatchewan is forecast to slip 21.3 per cent this year. Offsetting the decreases, Ontario is expected to gain 4.3 per cent.
Sales though the Multiple Listing Service are expected to range between 437,100 and 494,500 units in 2015, while the average MLS price is forecast to be between $402,139 and $439,589.
In 2016, MLS sales are expected to be between 424,500 to 491,300 units at an average price between $398,191 and $457,200.
Alberta is expected to be the big percentage loser with a drop in resales of 19.2 per cent this year, while Saskatchewan is expected to lose 9.8 per cent.
Ontario resales are forecast to gain 1.8 per cent, while B.C. is expected to add 6.5 per cent.
The Canadian Press