Canada Mortgage And Housing Corporation Forecasts 33 Percent Decline In 2009 New Home Constructions

Summary:
Ottawa, Ontario (AHN) - Canada Mortgage and Housing Corporation forecasts new home constructions in the country will decline by 33 percent. That would be equivalent to just 141,900 new homes.

Full Story:
AHN Staff

Ottawa, Ontario (AHN) - Canada Mortgage and Housing Corporation forecasts new home constructions in the country will decline by 33 percent. That would be equivalent to just 141,900 new homes.

Compared to the CMHC's Q1 forecast of 160,250 new homes it is an 11.4 percent drop. However, the agency predicts new home starts will rise again in 2010 to 150,300 new units.

Bob Dugan, chief economist of CMHC, explained the expected decrease in new home construction is because of the weak economic climate, more competition from existing home market and the impact of the strong home price hike from 2002 to 2008.

Dugan told the Financial Post, "Things have changed. We were a little too optimistic for housing starts in the first quarter."

CIBC World Markets senior economist Benjamin Tal said revisions of forecasts are inevitable these days. "It's a very hard market to forecast. The hope was this would be a swift recession. What we are realizing now is that although affordability is there, it's not really boosting housing starts."

In the same Q2 report the CMHC said existing home sales will also experience a decline to 357,800 units this year from 433,990 last year, but will experience a rise of 388,100 existing homes next year.


Source: http://www.allheadlinenews.com/articles/7015211714