It expects housing starts to slowly decrease over the coming years.
“On an annual basis, housing starts are expected to range from 181,300 units to 192,300 units in 2016 and from 172,600 units to 183,000 units in 2017, a slight upward revision from our previous outlook, but a slowdown compared to 2015 when there were 195,535 starts,” CMHC said in the report.
Home sales, meanwhile, are expected to moderate or increase in 2016 over last year’s total and decrease next year.
“There were 505,673 Multiple Listing Service® (MLS®) sales recorded in 2015,” CMHC said. “Sales are expected to range from 501,700 units to 525,400 units in 2016, but are expected to be in a lower range of 485,500 units to 508,400 units in 2017.”
The average Canadian home price is expected to continue to increase in the next two years, meaning CMHC doesn’t expect any sort of wide-scale correction.
“The average MLS® price is forecast to be between $474,200 and $495,800 in 2016 and between $479,300 and $501,100 in 2017. These levels are higher than the 2015 average price of $442,999,” CMHC said.
When assembling its outlook, CMHC said it looks at global as well as Canadian-specific economic conditions.
While the global economic growth is expected to slow this year before rebounding in 2016, CMHC predicts Canada’s growth is expected to accelerate in 2016, led by manufacturing exports and increased public spending.
Employment, however, is expected to increase to 7.2% this year before dropping to 7% in 2017.
“As the economy adjusts to lower oil prices and with the announcements of higher public spending, employment trends are projected to improve in 2017,” CMHC said.
The Crown Corporation released its long-term economic and housing forecast Wednesday morning.