Housing starts to cool in 2008: CMHC

n 2007, housing starts reached 228,343 units, an increase of 0.4 per cent over the previous year, the federal agency said.

Housing starts nationwide are expected to dip to 211,700 units in 2008, owing to high mortgage carrying costs, the Canada Mortgage and Housing Corp. said Monday.

CBC News

Housing starts nationwide are expected to dip to 211,700 units in 2008, owing to high mortgage carrying costs, the Canada Mortgage and Housing Corp. said Monday.

In 2007, housing starts reached 228,343 units, an increase of 0.4 per cent over the previous year, the federal agency said.

"Despite some global financial instability with regards to the U.S. housing market, Canada continues to experience robust employment levels, ongoing income gains and low mortgage rates," said Bob Dugan, chief economist for the CMHC, in a release.

"This has strongly supported Canada's housing markets. However, housing starts are expected to decrease in 2008 mainly due to recent increases in house prices, which will push mortgage carrying costs higher for home buyers."

The CMHC also said sales of existing homes, which reached 520,000 units in 2007, were expected to fall 3.9 per cent in 2008 to 499,650. A further decrease to 488,300 units in 2009 is projected as growth in the resale market becomes more balanced.

British Columbia's housing starts are expected to drop in 2008 from 39,195 units in 2007 to 33,250 units in 2008. Resale price increases, which grew by 12.1 per cent in 2007, will ease to six per cent in 2008 and five per cent in 2009 owing to an influx in listings and fewer resales, the federal agency forecast.

A drop in net migrants in Alberta is expected to cause a decrease in housing starts from 48,336 units in 2007 to 39,500 in 2008. Multiple Listing Service prices, which increased 24.4 per cent in 2007, are expected to increase by 3.9 per cent in 2008 and 5.4 per cent in 2009.