Rising housing starts in 2010 will cool recent surge in prices, says CMHC
Housing starts will rise in 2010, putting a lid on home prices this year after their 19% surge in 2009, the Canada Mortgage and Housing Corporation said yesterday. Between 152,000 to 189,300 housing starts are expected in 2010, up from 149,081 last year. CMHC said the relative lack of new listings for existing homes has pushed some of the demand into the new home market. But it said it expects prices to remain stable in 2010, at an average of $328,537, as the new housing stock brings balance back to the market. Tighter requirements for mortgage lending imposed by Ottawa, "will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home," said CMHC chief economist Bob Dugan. CMHC said the strong pace of existing sales over the last three quarters of 2009 will slow as pent-up demand is exhausted and financing costs rise in 2010.
