Canadian banks have recently issued reports probing the
consequences of cheap money, and trying to predict whether there is a bubble in
prices that will eventually pop and cause prices to crash. They are particularly
concerned about Vancouver and Toronto, where some have predicted price
corrections of up to 10 per cent because of overbuilding in the condo
market.
But CMHC said Monday Canadian markets would “remain steady in 2012 and
2013.
“With the Canadian economy set to expand at a moderate pace and mortgage
rates expected to remain low, activity levels in 2012 in both new home
construction and sales of existing homes will stay close to levels seen in
2011,” said Mathieu Laberge, deputy chief economist.
Also in the forecast: “Housing starts will be in the range of 164,000 to
212,700 units in 2012, with a point forecast of 190,000 units. In 2013, housing
starts will be in the range of 168,900 to 219,300 units, with a point forecast
of 193,800 units.
Existing home sales will be in the range of 406,000 to 504,500 units in
2012, with a point forecast of 457,300 units. In 2013, MLS sales are expected to
move up in the range of 417,600 to 517,400 units, with a point forecast of
468,200 units.
The average MLS price is forecast to be between $330,000 and $410,000 in
2012 and between $335,000 and $430,000 in 2013. CMHC’s point forecast for the
average MLS price is $368,900 for 2012 and $379,000 for 2013. The moderate
increases in the average MLS price are consistent with the balanced market
conditions that occurred in 2011, and that are expected to continue in 2012 and
2013.”
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