TORONTO (Reuters) - New homebuilding in Canada is expected to continue to moderate in the last quarter of 2012 and into 2013, while existing home sales should hold steady and prices climb at or slightly below inflation, the Canada Mortgage and Housing Corp said on Monday.
“A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year,” Mathieu Laberge, Deputy Chief Economist for CMHC, said in the federal agency’s fourth-quarter outlook.
“Nevertheless, employment growth and net migration will help support housing starts activity going forward,” he said.
Canada’s housing market, which roared higher in 2011 and the first half of 2012, has begun to moderate after the government tightened rules on mortgage lending in a bid to cool the market and prevent homebuyers from taking on too much debt.
In its quarterly outlook, the CMHC said housing starts will be in the range of 210,800 to 216,600 units in 2012, with a point forecast of 213,700. Homebuilding should slow further in 2013, with starts in the range of 177,300 and 209,900, with a point forecast of 193,600, the agency said.
Existing home sales will slow to a range of 449,200 to 465,600 units in 2012, with a point forecast of 457,400 units. In 2013, sales are expected to move up in the range of 433,300 to 489,700 units, with a point forecast of 461,500 units.
Price gains are expected to slow in 2012 but regain some strength in 2013. CMHC’s point forecast for the average price calls for a 0.2 percent gain to C$365,100 ($366,400) in 2012 and a 1.5 percent gain to C$370,500 for 2013. ($1 = 0.9965 Canadian dollars) (Reporting by Andrea Hopkins; Editing by Theodore d’Afflisio)