Lower home sales flatten construction in 2009: CMHA

The housing agency’s spring outlook report predicted residential construction activity would moderate to a pace “consistent with demographic needs” in 2009, in line with falling starts elsewhere in the province and the rest of the country.

As well, sales of existing homes are expected to plunge 10.1 per cent, while average prices of resale homes are set to decline by 0.5 per cent. “A second consecutive year of moderation in the resale housing market front will flatten the average Multiple Listing Service price, which is set to reach $289,000 in 2009,” CMHC senior analyst Sandra Perez Torres said in a statement. “The depletion in pent-up demand and lower spillover from a balanced resale market will slow down residential construction. Current economic prospects and affordability considerations will continue to favour high-density construction.”

The numbers match up with those of Ontario as a whole, which is predicted to post a 20.3-per-cent decline in resale volumes, to roughly 144,245 units in 2009, along with a 5.1-per-cent decline in home prices. Provincial starts are anticipated to fall by 31.6 per cent to 51,325 units.

However, the report also offered slightly more positive data for 2010, with the local housing market set to “reaffirm its historic resilient performance during broader economic fluctuations, thanks to a stable economy and a robust labour market.”

Those factors, CMHC said, would encourage more people to move into the Ottawa market and boost the local housing numbers.

As well, there will be a “modest pickup” across Ontario, which expects to see starts rise to 52,300 in 2010, while national starts are estimated to rise to 150,300 units. Sales across the country are also anticipated to rise to 386,100, and the average sale price will at least hold steady. -- By Krystle Chow