Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 15, 2008 08:15 ET

Canada Mortgage and Housing Corporation: Home Sales and Starts Move Lower in 2008 and 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 15, 2008) - BC will outperform most other provinces in economic and job growth during the next two years. This relative strength will translate into high levels of existing home sales, housing starts and house prices, according the latest forecast from the Canada Mortgage and Housing Corporation (CMHC).

"While levels of existing home sales and housing starts will remain above their 10-year averages, 2008 will see fewer resales and fewer foundations poured than last year," noted Robyn Adamache, Senior Market Analyst with CMHC.

Existing home sales will decline as mortgage carrying costs rise in response to higher home prices and mortgage rates. Income and population growth generated by tight labour markets will put upward pressure on existing home sales, lessening the decline. "Consumer confidence in BC has been trending lower in response to slower economic and job growth and this will have a dampening impact on housing demand," added Adamache.

Fewer housing starts are expected as economic conditions cool this year and the supply of existing homes for sale increases. Single-detached home starts will continue to trend lower, while multiple-unit home starts will be lower than last year's peak. With demand shifting to denser housing forms, more than sixty per cent of starts will be in multiple-unit housing developments. The large number of projects already in the construction pipeline in Vancouver and Kelowna will keep multiple-unit starts at high levels.

CMHC's Housing Market Outlook, British Columbia Region Highlights released today, includes forecasts for existing home sales and prices, as well as new home construction for major centres within BC including Vancouver Census Metropolitan Area (CMA), Abbotsford CMA, Kelowna CMA, Victoria CMA, Kamloops, Nanaimo and Prince George.

Canada Mortgage and Housing Corporation (CMHC) has been Canada's national housing agency for more than 60 years. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country.

The Housing Market Outlook, British Columbia Region Highlights report is available on the CMHC Web site: http://www.cmhc-schl.gc.ca.

To view tables accompanying this press release please click on the following link: http://media3.marketwire.com/docs/cmhc0515.pdf.

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