A moderate slowdown in new-home construction starts as well as sales of existing housing has been forecast by Canada Mortgage and Housing Corp.
The Ottawa-based federal agency did not predict a major decline, but its latest forecast suggests next year will be somewhat softer than estimates it issued in June, while 2012 may be somewhat stronger than previously expected.
CMHC has said for some time that it expects housing prices in most local markets to grow more slowly than they have been recently.
It said housing starts and home sales this year have been strong - particularly when it comes to multiple-dwelling units, such as condos and apartments - but will soften moderately in coming months into 2013.
"Balanced market conditions in most local housing markets will result in a slowing in house-price growth as well," Mathieu Laberge, CMHC's deputy chief economist, said in an outlook released Tuesday.
CMHC provides various levels of mortgage insurance to protect lenders from defaults by home buyers. It also monitors residential construction and housing sales and provides outlooks used by various economic sectors.
In the latest forecast, CMHC estimated there will be between 196,800 and 217,000 units of housing started this year, with a point forecast of 207,200 units. The point forecast is slightly higher than an estimate of 202,700 issued by CMHC in June, when the range was wider at between 182,300 to 220,600.
In 2013, CMHC estimated housing starts will be in the range of 173,000 to 207,400 units, with a point forecast of 193,100 units - about seven per cent fewer than this year under the latest forecast.
