2004 to be another strong year for housing market
By Leo Valiquette, Ottawa Business Journal Staff
Thu, Oct 23, 2003 11:00 AM EST
A strong local labour market is expected to keep Ottawa's housing market humming along in 2004, according to the latest forecast from Canada Mortgage and Housing Corp., albeit at a more moderate pace than in recent years.
The forecast for Ottawa came out of CMHC's Housing Outlook Conference that took place Thursday morning at the Ottawa Congress Centre.
For 2003, CMHC expects housing starts in the nation's capital to total 6,400, down from its spring forecast of 6,800. The new estimate actually matches CMHC's forecast for 2003 from a year ago.
The region's housing market has enjoyed a strong boom in recent years, as the slack left by a weak tech sector was picked up by an expanding federal government and a booming construction industry.
In 2002, local housing starts hit a 14-year high of 7,796. At 6,400, starts will be down by 17 per cent.
"Strong job growth this year will translate into sustained demand for housing for the rest of this year and into 2004," said Christian Douchant, CMHC's senior market analyst for Ottawa. "With over 25,000 new jobs in Ottawa to date, we can expect the demand for homes to remain firm."
The strong job market, low mortgage rates and expectations for continued migration to the city is expected to drive the market through 2004.
For 2004, housing starts are expected to remain at an historic high of 6,200, with 2,900 of them for more costly single-family homes.
CHMC also expects the resale market for older homes to be the hotbed of activity in the housing market next year, rather than new home construction. More homes will come onto to the resale market as home owners take advantage of high selling prices after three years of rapid appreciation and empty nesters downsize.
Douchant said the trend is already emerging, with the number of homes listed for resale up 10 per cent from last year.
About 12,800 homes are expected to change hands on the resale market in 2004, up from the forecast of 12,500 for 2003. Prices will continue to push upward due to the demand, by nine per cent this year and nine per cent again in 2004.
"Of course in high tech there's still some uncertainty but overall job growth in the economy has been pretty good for Ottawa compared to Ontario," Douchant said.
"It's not going to be the record year we had last year but ... its still going to be above average for the CMA. It's a steady pace. It's a good sustainable pace."
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