Ontario Housing Demand Shifts to Less Expensive Housing

TORONTO, ONTARIO--(Marketwire - May 30, 2011) - 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 released today.

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," added Tsiakopoulos.

To view the graphs "Ontario MLS® Sales" and "Ontario Starts (All Areas)", please visit the following link: http://media3.marketwire.com/docs/cmhc_graphs_ont530_eng.pdf

As Canada's national housing agency, CMHC draws on 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions. For more information, visit www.cmhc.ca or call 1 800 668-2642.