Ontario - housing construction to slow
Aug 15th 2008, 1:19 pm
#1
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Ontario - housing construction to slow
Total housing starts will jump nearly
twelve per cent to 76,025 units in
2008, but drop back to 65,000 in
2009. For several years, new home
sales have exceeded starts. Total
starts forecast for 2008 reflect this
backlog. Economic uncertainty,
rising new housing prices and a
greater selection of homes available
in the resale market will result in
fewer new home sales in 2008 and,
by extension, a dip in new home
starts in 2009.
Economic growth in Ontario will
slow to 0.3 per cent in 2008, but
recover to 1.9 per cent in 2009. The
sharp drop in 2008 reflects lower
exports, a business drawing down of
business inventories and slowing
investment. Employment
adjustments will be more gradual.
Consequently, consumer demand
will support the economy in 2008,
but slower employment growth will
limit the recovery in Ontario’s
economic growth rate in 2009 to
less than what it had been in 2007.
After dropping by half last year, the
net outflow of migrants to the west
will gradually diminish. Higher
housing costs and slowing
employment growth in western
Canada mean those pastures are
appearing less green to Ontarians.
International immigration will move
up to levels reached at the turn of
the new millennium.
In Detail
Single Starts: Single starts will
decrease to 34,075 units and 29,000
units in 2008 and 2009 respectively.
Higher housing prices are shifting
demand from relatively expensive
single-detached houses to more
accessible new multi-family or resale
homes.
Multiple Starts: Multiple-family
home starts will rise to 41,950 units
before moderating to 36,000 units
in 2008 and 2009 respectively. With
empty-nesters as young as 55
beginning to downsize, apartments
and town homes will be key to future
new housing construction.
Resales: Existing home sales will
slow, reaching 189,150 units and
178,000 unit sales in 2008 and 2009
respectively. The income needed to
service the mortgage on an average
priced home is rising faster than
actual household incomes,
dampening housing demand.
Prices: The average MLS® price in
Ontario will rise by 2.8 per cent and
2.3 per cent in 2008 and 2009
respectively, as the rate of price
growth follows the same cyclical
trend as sales.
Canada Mortgage and Housing Corporation
Housing Market Outlook - Canada Edition - Date Released: Third Quarter 2008
twelve per cent to 76,025 units in
2008, but drop back to 65,000 in
2009. For several years, new home
sales have exceeded starts. Total
starts forecast for 2008 reflect this
backlog. Economic uncertainty,
rising new housing prices and a
greater selection of homes available
in the resale market will result in
fewer new home sales in 2008 and,
by extension, a dip in new home
starts in 2009.
Economic growth in Ontario will
slow to 0.3 per cent in 2008, but
recover to 1.9 per cent in 2009. The
sharp drop in 2008 reflects lower
exports, a business drawing down of
business inventories and slowing
investment. Employment
adjustments will be more gradual.
Consequently, consumer demand
will support the economy in 2008,
but slower employment growth will
limit the recovery in Ontario’s
economic growth rate in 2009 to
less than what it had been in 2007.
After dropping by half last year, the
net outflow of migrants to the west
will gradually diminish. Higher
housing costs and slowing
employment growth in western
Canada mean those pastures are
appearing less green to Ontarians.
International immigration will move
up to levels reached at the turn of
the new millennium.
In Detail
Single Starts: Single starts will
decrease to 34,075 units and 29,000
units in 2008 and 2009 respectively.
Higher housing prices are shifting
demand from relatively expensive
single-detached houses to more
accessible new multi-family or resale
homes.
Multiple Starts: Multiple-family
home starts will rise to 41,950 units
before moderating to 36,000 units
in 2008 and 2009 respectively. With
empty-nesters as young as 55
beginning to downsize, apartments
and town homes will be key to future
new housing construction.
Resales: Existing home sales will
slow, reaching 189,150 units and
178,000 unit sales in 2008 and 2009
respectively. The income needed to
service the mortgage on an average
priced home is rising faster than
actual household incomes,
dampening housing demand.
Prices: The average MLS® price in
Ontario will rise by 2.8 per cent and
2.3 per cent in 2008 and 2009
respectively, as the rate of price
growth follows the same cyclical
trend as sales.
Canada Mortgage and Housing Corporation
Housing Market Outlook - Canada Edition - Date Released: Third Quarter 2008
