Housing market to moderate in 2014: CMHC

The housing market in Saskatchewan will be one of moderation as housing starts will edge lower this year and next, though starts will still be well above the 10-year average, says the latest Housing Outlook report from Canada Mortgage and Housing Corp. (CMHC).

Builders will remain busy, said Goodson Mwale, CHMC senior market analyst for Saskatchewan.

“It is still a strong market, there is still strong demand, the drivers of housing demand remain mostly supportive (employment, wages and in-migration),” Mwale said.

“But the number of starts will not be as pronounced as 2012 and 2013, he said.

Lai Sing Louie, CMHC’s regional economist for the Prairies and Territories Region, said the supply side of the market is rising, which will curtail some future activity.

“Rising supply and slower net migration will moderate starts,” Louie said.

CMHC forecasts new construction in the province of 3,900 single-detached units for 2014 and 3,800 units for 2015.

That compares

to

4,184 units in 2013.

After the province saw 4,106 multi-family starts in 2013, CMHC forecasts starts will ease to 3,800 units in 2014 and 3,700 units in 2015.

On the resale side of the housing market, Saskatoon saw a record high 5,543 MLS sales in 2013.

“Strong employment growth, low mortgage rates, rising wages and continued population gains contributed to the higher level of sales in 2013,” Mwale said.

Mwale said sales of existing homes will likely hit a new record in 2014 at 5,700 units and then 5,775 units in 2015.

With the number of listings up about nine per cent, upward pressure on prices should ease, he added.

Housing starts in Canada are forecast to be 187,300 units in 2014 (76,700 single family and 110,000 multifamily).