Will Canada’s housing markets moderate in 2016 and 2017?

The Canada Mortgage and Housing Corporation (CMHC) has released its Fourth Quarter 2015 Housing Market Outlook, Canada Edition, announcing that the country’s housing markets should moderate over the next couple years.

“In 2015, increased housing market activity in provinces like Ontario and British Columbia – provinces that have benefitted from declining energy prices, a lower Canadian dollar and continued low mortgage rates – offset slowdowns in oil-producing provinces like Alberta,” says Bob Dugan, CMHC Chief Economist. “We expect, however, that this counterbalancing effect will decrease over time. As such, housing starts and MLS® sales are projected to moderate in 2016 and 2017.”

Construction of multi-unit projects is expected to slow due to developers managing their inventory levels. CMHC predicts high levels of completed unsold units. With less units hitting the market and housing starts slowing, price growth will also gradually slow.

Housing outlook over the next few years

2015

Housing starts are expected to range from 162,000 to 212,000 units, with a point forecast of 186,900.

MLS sales will range from 444,000 to 546,000, with a point forecast of 494,700.

The average selling price through the MLS will range from $417,000 to $459,000, with a point forecast of $437,700.

2016

Housing starts are expected to range from 153,000 to 203,000 units, with a point forecast of 178,150.

MLS sales will range from 425,000 to 534,000, with a point forecast of 479,500.

The average selling price through the MLS will range from $420,000 to $466,000, with a point forecast of $443,300.

2017

Housing starts are expected to range from 149,000 to 199,000 units, with a point forecast of 173,650.

MLS sales will range from 416,000 to 536,000, with a point forecast of 476,000.

The average selling price through the MLS will range from $424,000 to $475,000, with a point forecast of $449,600.

For more information on CMHC’s recent Housing Outlook, click here.