CMHC changed forecasts for housing starts in Canada for 2013, 2014

Canada Mortgage and Housing Corp. has tweaked its 2013 and 2014 forecasts for housing starts.

CMHC now expects slightly more housing starts this year and slightly fewer in 2014 than in the previous outlook issued in August.

That will result in a period of relative stability, although both years will be slower than 2012, when there were 214,827 housing units started.

The new forecast is for between 179,300 and 190,600 units this year, with a mid-point of 185,000 units.

That's up from the previous 2013 forecast of 182,800 starts - an increase of 2,200 that is almost offset by a lower forecast for 2014.

CMHC's new 2014 range is 163,700 and 205,700 units, or 184,700 at the mid-point, down 1,900 from 186,600 units in the August forecast.

Price growth next year is expected to be in line with inflation, with the average price of houses sold over the Multiple Listing Service in 2014 coming in at $385,200, compared to $378,000 this year, the Crown corporation says in its latest housing market outlook.

CMHC expects that the number of homes sold over the MLS this year will come in around 456,700, which is about the same as 2012, when 454,005 homes changed hands. It forecasts a rise in sales to 468,200 units next year, with sales rising in the first half of 2014 then moderating during the latter part of the year.

Sales have defied expectations this year. At the start of the summer nearly all economists were predicting a decline in sales for 2013, but the market has since rebounded.

Likewise, housing starts, while generally slowing, have been higher than anticipated. CMHC said Thursday it is anticipating starts to be stable next year, around 184,700 units, compared to 185,000 this year and 214,827 in 2012.

While factors such as employment growth and migration are continuing to support the housing market, "in the new home market, builders are nevertheless expected to limit the number of housing starts while inventories of unabsorbed units, completed and under construction, are drawn down," Mathieu Laberge, deputy chief economist of CMHC, said in a press release. "In the resale market, home buyers have been motivated to advance their purchases and lock-in pre-qualified mortgages given the recent moderate increase in mortgage rates. It is expected that existing home sales will increase modestly in 2014 with improving economic conditions."

It has been difficult to make accurate predictions about the Canadian housing market in recent years. The government has been taking steps to cool it off, and economists have been surprised by its resiliency.

In June CMHC was forecasting a 1.6 percent increase in average prices this year and roughly 443,400 sales.

Its current forecast for starts is also slightly higher than in June, when it expected about 182,900 units to get under way this year. bnn.ca