TORONTO (Reuters) - Toronto’s housing market will stay healthy next year as new home groundbreakings in Canada’s most populous city jump even as existing home sales cool, the Canada Mortgage and Housing Corp said on Thursday.
The federal government agency expects a 26-percent rise in housing starts next year to 36,140 units.
But existing home sales are expected to dip to 78,000 in 2010 from 82,000 this year. Still, CMHC expects average prices to rise by 5 percent, which is in line with the annual average for this decade.
The agency said that while overall demand for home ownership is expected to moderate next year, households with stable employment will take advantage of improved affordability.
Housing has been a rare bright spot as the Canadian economy struggles to emerge from recession. Toronto has seen an upswing in housing activity in recent months, helped by low mortgage rates.
The Bank of Canada cut interest rates to a record low this year and conditionally pledged to keep them there until at least the end of the first half of 2010.
Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson