Canada’s housing market is set to cool further with prices and sales expected to fall, according to CMHC’s Housing Market Outlook (Q3) released today. CMHC is now forecasting the average home price to be $368,000 in 2012 (down from its previous forecast of $372,700). It’s also lowering its average home price forecast for 2013 to $377,300 from $383,600.
But what about Alberta? According to CMHC:
Prices: With a transition to balanced market conditions unfolding, expect price growth to increase over the forecast period. The average resale price in Alberta is projected to be $362,200 in 2012 and $372,300 in 2013.
Resales: Higher monthly carrying costs are expected to dampen demand next year, which will be countered by rising employment and new household formation. MLS® resales in Alberta will increase in both 2012 and 2013 to 59,800 units and 61,000 units, respectively
Multiple Starts: The resumption of previously halted or delayed projects along with new high-rise condominium projects has resulted in more construction activity. Multi-family starts will move upwards in 2012 to 14,200 units. To reduce the risk of an increase in inventory in the next few years, developers are expected to moderate multi-family starts in 2013 to 13,800 units
Single Starts: Existing homeowners will see the value of their property rise and this will help with “move-up” buying of new units. In response to heightened demand, builders have been increasing construction in 2012. By year end, single-detached starts are projected to reach 17,600 units, while 2013 will reach 18,400 units.
Migration: First quarter 2012 interprovincial migration was the highest first quarter amount on record going back to 1970. As the local labour market is not meeting all the demand of Alberta’s expanding economy, the province is experiencing an increase in temporary foreign workers. In total, net migration is projected to reach 57,800 in 2012 and remain elevated at 48,500 in 2013. Migration flows are expected to be a positive factor contributing to housing demand over the forecast period.
Drilling down further to the Calgary real estate market, CMHC is predicting that
The average MLS residential sale price in the Calgary region will climb by more than $20,000 over the next two years, according to Canada Mortgage and Housing Corp…the average MLS sale price in the Calgary census metropolitan area will jump from $402,851 in 2011 to $413,000 this year and then to $424,000 in 2013. – Calgary Herald
While $20k might seem like a big jump, it translates to only a 2.5% and a 2.7% year-over-year increase respectively which is just above the rate of inflation – the way a stable market should be acting.