OTTAWA,
- Canada's federal housing agency gave a cooler outlook for housing starts this
year and next, saying that lower oil prices are contributing to differences
across the country's regional markets.
In
addition, with the inventory of completed but unabsorbed homes above the
historical average, the pace of new construction is expected to moderate over
the next couple of years, the Canada Mortgage and Housing Corporation (CMHC)
said in a report.
Canada
avoided the worst of the global financial crisis and its housing market has
accelerated in the years since, helped by low interest rates. While some have
raised the possibility the sector is due for a painful correction, policymakers
still foresee a soft-landing on the national level.
The
CMHC forecast that housing starts will range between 166,540 and 188,580 units
in 2015, with a point forecast, or most likely outcome, of 181,618.
For
2016, CMHC expects a range of 162,840 to 190,830 starts, with a point forecast
of 181,800, below the previous point forecast of 185,100.
"Lower
oil prices are contributing to disparities between provincial housing
markets," Bob Dugan, the CMHC's chief economist, said in a statement.
A
slowdown in housing starts and resales in oil-sensitive provinces such as
Alberta will be partly offset by increased activity in other provinces such as
Ontario and British Columbia, which should benefit from cheaper energy prices,
a weaker Canadian dollar and low mortgage rates, Dugan said.
The
CMHC upped its price forecast for existing home sales compared with three
months ago, predicting a price range between C$402,139 ($326,835.99) and
C$439,589 in 2015, with a point forecast of C$422,129. That is modestly higher
than the point forecast of C$414,200 was given in February.
Next year's point
forecast was also raised slightly, to C$428,325 from the previous C$420,900.
Still, with the recent decline in the price of oil, a major export for Canada,
there is more downside risk to the forecast than upside, CMHC said.
