OTTAWA, May 15 (Canada News Wire Telbec) – Housing starts will ease this year to 213,425 units after reaching 227,395 units in 2006, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook, Canada Edition report. Residential construction will continue to decline in 2008 to 200,175 units, marking 7 consecutive years in which housing starts exceed 200,000 units.

“Although fundamental factors such as high employment levels, income gains and low mortgage rates remain supportive of strong demand, housing starts will resume a gradual downward trend in 2007. The level of new home construction will decrease in all provinces with the exception of Saskatchewan,” said Bob Dugan, Chief Economist at CMHC. “The lower demand for homeownership will be mainly due to the rise in mortgage carrying costs and the erosion of the pent-up demand that built up during the 1990s.”

Existing real estate sales, as measured by the Multiple Listing Service (MLS), will register their best year on record with 487,500 units in 2007. The record activity in Alberta will be a key factor leading to the 0.9% increase in the national level of MLS sales compared to the previous year. A rising supply of listings will give home buyers more choice and help keep the level of MLS sales well above the 450,000 mark for the next two years. The level of MLS sales is expected to reach 466,490 units in 2008, its fourth highest level on record. Growth in the average MLS price will remain high at 9.6% in 2007 mainly because of continued strong price pressures in Western Canada. As most real estate markets move toward more balanced conditions, growth in average MLS price is forecast to slow to 4.9% in 2008.

For the longer term, between 2009 and 2011, the annual number of housing starts will slow gradually to reach 188,300 units, a level that is more consistent with demographic fundamentals. Real estate demand will continue to be supported by a positive economic picture and a healthy employment market which will attract a steady inflow of immigrants throughout this period.

In Ontario, real estate demand across the province will remain healthy despite moderate economic growth, higher new home prices, increased choice in the real estate market, and land constraints. Housing starts will slide from 73,417 units in 2006 to 68,000 units in 2007 and to 63,875 units in 2008. These declines will move housing starts in line with the average level over the last fifteen years. The average MLS price in Ontario will rise by 5.4% and 3.3% in 2007 and 2008, respectively.

Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency for more than 60 years. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country. For more information, visit www.cmhc.ca or call 1 800 668-2642.

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Contact Laurin Jeffrey for more information