Ontario Housing Demand Shifts to Less Expensive Housing

Ontario housing activity is set to moderate in the next few quarters and isn't expected to stabilize until the latter part of 2011 and into 2012, according to the 2011 Second Quarter CMHC Housing Market Outlook Canada Edition. Highlights of the Ontario forecast include:

Ontario economy lags activity in rest of Canada during 2011/12 after leading in 2010.

Current trends suggest existing home sales will moderate before growing modestly into 2012.

Owing to economic uncertainty, Ontario sales will range between 170,000 to 217,000 transactions this year and next.

After sharp increases early this year, Ontario home prices will grow closer to inflation as markets move to a more balanced state.

Ontario home starts will weaken from 2010 levels reaching 59,900 units in 2011 and 61,500 units in 2012.

Owing to economic uncertainty, starts will range between 54,000 to 68,000 units this year and next.

Demand for apartment ownership and rental accommodation will remain strong.

"Consumer buying patterns, particularly in more expensive southern Ontario markets, will increasingly shift to less expensive housing over the next few years thanks to tighter mortgage market conditions. This bodes well for the apartment ownership and rental sector," said Ted Tsiakopoulos, CMHC's Ontario Regional Economist. "Northern Ontario housing markets are an exception as strong activity in the mining sector and relatively more affordable housing will support growing demand for low density housing." For more information visit www.cmhc.ca .

(Article was published in OREA's JUNE 2011 issue of Queens Park Plus)