While addressing the media on Monday, Canada’s Mortgage and Housing Corporation stated that low crude oil prices will play a part in the split of the Canadian housing market that will result into provinces which produce oil slowing but others gaining ground.
According to the federal agency, the overall pace at which housing starts will slow down in 2015 as well as 2016, but regional difference is expected. A statement issued out by Bob Dugan, CMHC’s chief economists, said that there will be a slowdown in housing starts. In addition to that the statement also pointed out the fact that re-sale transactions in provinces which are termed as oil-producing for example Alberta are bound to be offset, be it partly, by the increase in activity in housing market of other provinces.
“Areas or provinces which tend to have an increase in their housing market are British Colombia and Ontario. This areas tend to benefit from a positive effect that is brought by energy prices declining as well as a Canadian dollar that is low and a continuous low mortgage rate that is witnessed in this provinces,” the statement said.
Second quarter forecast by CMHC this year calls for between 166,540 and 188,580 housing starts. For 2016, the forecast is between 162,840 and 190,930. The first quarter forecast for 2015 were 154,000 and 201,000 while for 2016 it was 148,000 to 203,000 units.
It is expected that regionally, Alberta will see a drop of 13% in its housing starts. Saskatchewan is also expected to this year by 21.3%.