Canada Mortgage and Housing Corp predict that sales statistics will experience a slowdown due to the increase in the number of unsold homes, mortgage rates, prices and supply of rental units.
It is expected that the housing market will moderate over the following two years, according to the CMHC in its fourth-quarter outlook.
Bob Dugan, a CMHC Chief Economist stated that the gains in provinces like Ontario and B.C have managed to balance the slowdown in oil-producing provinces such as Alberta.
“We expect, however, that this counterbalancing effect will decrease over time,” Dugan said.
“As such, housing starts and MLS sales are projected to moderate in 2016 and 2017.”
The rise in household debt to record levels in relation to income has multiplied concerns by economists in the housing market.
Moreover, low-interest rates have boosted fuel sales and improved prices in many markets.
However, CMHC expects interest rates to increase slowly but surely, commencing late next year.
For the period of 2015, CMHC anticipate starts to range between 162,000 and 212,000 units with a forecast of 186,900 units.
For this year, 2016, housing starts will probably slip between 153,000 and 203,000 units, with a forecast of 178,150 units, decreasing to units between 149,000 and 199,000 with a forecast of 173,650 units in 2017.
MLS system sales are presumed to range between 444,000 and 546,000 units this year with a forecast of 494,700 units.
In 2016, sales are predicted to range from 425,000 to 534,000 units in 2017 with a forecast of 476,000.
Average MLS price is projected to be between $417,700 and $459,000 this year with estimates of $437,700 before increasing to $420,000 and $466,000 in 2016.
In 2017, average prices are said to range between $424,000 and $475,000.