ONTARIO HOME SALES WILL COOL BUT BETTER DAYS AHEAD IN 2010

Toronto - A slowing provincial economy will dampen housing demand according to 2009 Second Quarter CMHC Housing Market Outlook - Canada Edition released today. But a more stable provincial economy will lend support to improved affordability conditions and will help boost demand in 2010.

Highlights of the Ontario forecast include:

The Ontario economy will contract before gradually recovering in 2010

Ontario resale volumes will slow before rising in 2010 - reaching 144,2451 units this year, down from over 181,000 units in 2008

Slowing demand conditions will dampen home prices and put buyers in the driver’s seat. Home prices will fall by 5.1 per cent this year and by 3.6 per cent in 2010

Home prices in urban markets tied to auto production and US trade which include Windsor, Oshawa and St. Catharine’s-Niagara will be under pressure most

Ontario housing starts will decline to 51,325 units but owing to economic uncertainty will range between 48,000 and 53,000 units this year before staging modest pickup in 2010

Demand shift to more modestly priced ownership and rental housing will support high density construction activity in Toronto, Ottawa and Barrie.

Hamilton, Thunder Bay, Ottawa and Kitchener new home markets will enjoy greater starts stability as these centers represent the tightest Ontario resale markets

“Ontario housing starts have been running above demographic trends in recent years. This trend will be reversed in the next few years largely due to a slowing Ontario economy,” said Ted Tsiakopoulos, CMHC’s Ontario regional economist. “Despite a modest economic recovery across the province next year, stable labour market conditions will support improved affordability conditions and will help boost housing demand in 2010”, added Tsiakopoulos.