According to the Ontario Real Estate Association and CMHC Housing Market Outlook – Canada Edition, the housing demand pace in the real estate market will be moderate later this year and into 2011, however demand will be supported by firming employment conditions in Ontario.
Highlights of the Ontario forecast:
- Ontario will be the leader driving Canadian economic recovery in 2010/11
- Job markets on a recovery path and the good sector shows signs of stability
- Quarterly Ontario resale volumes will moderate from record levels but owing to economic uncertainty will range between 181,500 and 224,000 unit sales this year and next
- Higher home prices will prompt more listings and balanced market conditions by 2011 – resulting in more of a flat price trend
- Ontario home starts will strengthen from 2009 levels reaching 63,200 units this year and 58,800 units in 2011
- Single detached home construction will lead starts early in 2010
- Rising mortgage carrying costs will shift demand from expensive to more inexpensive housing later this year and into next
- Ontario residential construction activity moves higher beyond 2011 trending closer to demographic demand levels
The Canadian Real Estate Association has lowered its forecast for home sales in the MLS system. Sales activity in Ontario is unfolding as predicted, however the decline in affordability in British Columbia has impacted sales in that province during the first quarter.
Ontario is expected to see a record number of sales in 2010, but only by a small margin that was originally forecast.
The national average home price is supposed to climb 1.6 per cent in 2010, reaching a record $325,400. All provinces except British Columbia and Ontario, are forecast to post modest average price gains in 2011. With higher priced transactions, these two provinces might see a decline in activity with the higher priced transactions weakening the most. Average prices are forecast to sag in these two provinces in the second half of 2010 before stabilizing next year.
With fewer higher priced properties in the calculation of the nation average, the average price is forecast to decline by 2.2 per cent in 2011 as a result.
