Updated: Mon Nov. 02 2009 10:03:30 AM
CTV.ca News Staff
Housing starts are on the rise in Canada, according to new figures from the Canada Mortgage and Housing Corporation which suggest the residential real estate market is shrugging off the effects of the current recession.
CMHC projects that housing starts will reach 141,900 by the end of the year, and will likely reach 164,900 in 2010. The figures were released Monday, as part of the CMHC's Housing Market Outlook report for the year's fourth quarter.
The projected 2009 figure for housing starts represents a drop of nearly one-third from the previous year, but the CMHC remains confident that housing starts -- as well as Canadian housing markets -- are on the rise going forward.
The CMHC expects "housing markets across Canada to strengthen leading into and over the course of 2010 as economic conditions improve," the organization's chief economist, Bob Dugan, said in a statement.
Dugan said that demand for existing homes has been increasing at a time when inventory levels remain low for both the new and existing home markets.
"As a result, strong housing demand will be reflected in higher levels of housing starts in 2010," Dugan said.
The CMHC also says that sales of existing homes "have become more robust" since the start of the year and are projected to reach 441,300 units for 2009 - a total that would best the 433,990 units sold nationwide in 2008. The CMHC predicts that approximately 445,150 units will be sold in 2010.
For those looking to buy a home next year, the CMHC says the price tag will likely be steeper than it is today, as the average MLS listing price is expected to rise to $312,950 in 2009, and to $324,500 in 2010.
The CMHC says that sellers will continue to hold the upper hand in the housing markets, which will contribute to prices creeping upward in the coming year.
The report from the CMHC does, however, say that economic uncertainty could impact the growth of the national housing market, if the Canadian economy does not continue to recover as expected.
Bank of Canada governor Mark Carney recently suggested that Canadians may be borrowing too much to buy homes, as they take advantage of "exceptionally low" mortgage rates that have spurred the housing market.