CMHC predicts strong year for housing starts in ‘06, but decline in 2007?

Canada Mortgage and Housing Corp. says this should be another strong year for housing starts, but they are expected to decline in 2007.

The agency predicts starts will reach 227,900 units in 2006, before decreasing to 210,900 units next year.

But although residential construction will ease, 2007 will mark the sixth consecutive year in which housing starts exceed 200,000 units.

‘‘Record activity in Alberta is the main factor leading to the 1.1 per cent increase in national housing starts ... although starts are up in all western provinces and in parts of Atlantic Canada as well,’’ stated CMHC chief economist Bob Dugan.

‘‘In 2007, starts will resume their downward trend when home ownership demand is dampened due to the continued erosion of the pent-up demand that built up during the 1990s and the rise in mortgage carrying costs.’’

The CMHC said sales of existing home, as measured by the Multiple Listing Service sales, will end the year at 481,400 units, down slightly from the 2005 record.

Between 2008 and 2010, the annual number of housing starts will decline gradually to reach 187,900 units.

Here are forecast starts by province for 2006 (and 2007):

   

   — Newfoundland-Labrador, 2,215 (2,150)

   — Prince Edward Island, 750 (700)

   — Nova Scotia, 5,000 (4,575)

   — New Brunswick, 4,100 (3,750)

   — Quebec, 45,800 (40,700)

   — Ontario, 75,200 (69,100)

   — Manitoba, 4,950 (5,000)

   — Saskatchewan, 3,600 (3,600)

   — Alberta, 49,400 (46,000)

   — British Columbia, 36,900 (35,300)