Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 19, 2010 11:15 ET

Canada Mortgage and Housing Corporation: Balanced Housing Market Conditions Forecast for Vancouver

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 19, 2010) - According to Canada Mortgage and Housing Corporation (CMHC), a combination of moderating home sales and an increase in the number of listings will mean more balanced market conditions in Vancouver for the remainder of this year and into 2011. Housing demand will be supported by a stronger local economy and continued population growth, although the expectation that mortgage rates will rise may dampen demand starting in the second half of this year.

"As the resale market adjusts to more balanced supply and demand conditions, the pace of price growth will slow. However, there is often a lag between when conditions become more balanced and when prices react," said Robyn Adamache, Senior Market Analyst with CMHC. As a result of high prices and robust sales in the early part of this year, the increase in annual average MLS® prices for 2010 is forecast to reach eleven per cent. The impact of higher mortgage rates will affect housing markets next year and the forecast is for a modest three per cent rise in prices in 2011.

New home construction in the Vancouver CMA is projected to increase this year and next. An estimated 16,000 to 18,000 new households will be added to the region annually, largely as a result of migration, contributing to housing demand. "The quick recovery in existing home sales and strength in prices during the past year are also giving developers confidence to move forward with new projects," added Adamache.

As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions.

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