Housing market to stay stable, says CMHC

Canada Mortgage and Housing Corp. is predicting the Canadian housing market will remain fairly stable this year and next, with little change from 2011 in prices, new home construction and sales of existing homes.

The national housing agency says that's because the economy appears set to expand at only a moderate pace over the next two years and mortgage rates will remain low.

The CMHC says it expects the average house price in Canada to hit $368,900 for 2012 and $379,000 for 2013.

Housing starts are expected to be around 190,000 units this year and 193,800 units in 2013, while existing home sales are expected at about 457,300 units in 2012 and moving a little higher to 468,200 units in 2013.

Low mortgage rates and high demand have driven housing prices sharply higher in large urban centres such as Toronto and Vancouver, leading many experts to warn that a housing bubble could burst when rates finally do rise.

Despite those warnings and alarms from top government officials that Canadians are taking on too much debt overall, the housing market has seen little change over the past few years, with price growth slowing but not retreating in most areas.