A rebound in home construction is set to strengthen this year as the Canadian economy continues to show signs of recovery, according to Canada Mortgage and Housing Corporation.
Between 152,000 to 189,300 housing starts are expected in 2010, up from 149,081 units last year, the national housing agency said. In 2011, housing starts will total 156,400 to 205,600 units, it said.
"Canadian housing markets will benefit from improving economic conditions and low mortgage rates," said CMHC chief economist Bob Dugan. "As well, measures recently announced by the government of Canada to support the long-term stability of Canada's housing market will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home."
Dugan noted that the existing home market has shifted from a buyers' market to a sellers' market.
"The relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010, CMHC said.
Average home prices are likely to remain at levels reached in the last quarter of 2009, before rising modestly in 2011, it said.
