Stable Housing Market Forecast Into 2011

The Canada Mortgage and Housing Corporation (CMHC) issued a forecast for the remainder of this year's housing activity, and into 2011. By their calculation, the future of the Canadian housing market looks encouragingly stable.

Bob Dugan, Chief Economist for the CMHC, points out that, in late 2009 and early 2010, sales activity included much pent-up demand from early 2009. With the demand now exhausted, and with interest rates starting to creep upwards, the pace of activity in the resale market will finally ease. Dugan predicted that as MLS® sales ease and inventory levels increase, the existing home market will move toward balanced conditions in the next two years.

"Canadian housing markets have recovered from the low levels posted in 2009," noted Dugan. "Moving forward, housing starts will moderate as activity becomes more in-line with long term demographic fundamentals. New measures for government-backed mortgage insurance introduced by the Government of Canada that took effect on April 19, 2010 will continue to support the stability of Canada's housing market."

From a pricing perspective, with the forecast of an improved balance between demand and supply, the average MLS® price is expected to stabilize through the end of 2010, and then rise modestly in 2011.

Of course, all real estate is local, and the trends in your area — or even in your building! — may not necessarily follow the national forecast. If you're thinking of buying or selling, you'll want a detailed history of local real estate activity, specific to condominiums, and first-hand knowledge of new properties on the market.