By next year starts will fall in line with long-term averages

Despite British Columbia’s growing population and job numbers, a well-supplied resale home market will offer more choice to home shoppers and reduce the demand for new homes.

Housing starts will move back toward their long-term average by 2009, according to the latest forecast from the Canada Mortgage and Housing Corporation (CMHC).

While housing starts will be lower next year, they will remain high compared to historical levels.

“B.C.’s tight labour market and robust income growth will partially offset the dampening effect of rising mortgage carrying costs on the demand for new and existing homes,” noted Carol Frketich, CMHC’s regional economist.

Housing starts will decline to 35,800 units in 2008 and 31,500 in 2009, from 39,195 units in 2007.

Longer build times for complex projects will keep residential builders busy despite lower starts numbers.

MLS resale markets will be calmer compared to the last five years.

An increase in homes for sale and a reduction in resale transactions will move most resale markets in B.C. to balanced demand and supply conditions from the sellers’ market conditions which have prevailed in recent years.

Price growth will slow to a pace more in line with the general rate of inflation.

The average MLS price in British Columbia will grow by 7.6 per cent in 2008 and 3.3 per cent in 2009.

CMHC’s Housing Market Outlook, British Columbia Region Highlights, includes forecasts for existing home sales and prices, as well as new home construction for major centres within BC including Vancouver Census Metropolitan Area (CMA), Abbotsford CMA, Kelowna CMA, Victoria CMA, Kamloops, Nanaimo and Prince George.

The Housing Market Outlook, British Columbia Region Highlights report is available on the CMHC Web site: http://www.cmhc-schl.gc.ca