As sales decline and prices fall, homebuilders will ratchet back on construction starts, the poll showed.
excesses are there, it plain and clear to see. boom and bust, the federal government tightened mortgage lending rules four times in the last four years to make it harder for home Nike Vapormax Flyknit Triple Black buyers to take on too much debt in their quest for a home.
Median forecasts had Toronto prices rising 5.1% in 2012 and falling 1.3% in 2013. But respondents saw an eventual 5% fall from current levels. Vancouver prices were forecast to fall 2.7% in 2012 and 3.8% in 2013, with an eventual decline of 12.5%.
On a national basis, Canadian house prices are expected to drop 10% over the next several years, and housing starts will fall more than 17% to 184,000 units by mid 2013, according to median results of the poll, which was conducted over the last week.
housing market is something to be very worried about, said David Madani, Canada economist at consultancy Capital Economics in Toronto.
Sales of existing homes were down 15.1% in September from a year earlier, and were 6.5% lower in the third quarter from the previous three months, according to data from the Canadian Real Estate Association.
Respondents in the Reuters poll said house prices will rise 2.0% in 2012 and fall 0.1% in 2013, according to the median of 18 forecasts, putting most of the losses at least two years Nike Air Uptempo Blue Orange
House prices have already begun to cool in some areas but nationally remain 23% higher than their trough in March 2009, according to a Canadian Real Estate Association index.
Canada home prices seen falling
The rule changes gradually shorted the maximum mortgage length from 40 years to 25 and also put limits on how much homeowners could borrow against their house, among other measures.
Madani, whose forecasts are included in the Reuters poll, has consistently predicted a 25% drop in prices and a plunge in housing starts to just 150,000 next year as builders grapple with too many homes and falling demand.
should help pick up the slack, Alexander said.
While interest rates are not expected to rise until mid 2013, the stiffer lending rules and government warnings about the high debt loads of Canadian households have helped cool the ardor of home buyers, with the hottest markets, including Vancouver and Toronto, already feeling a chill.
one symptom that housing bubbles always have in common is the over building, and I feel the banks play this down a bit, said Madani, pointing to recent housing starts well above the 175,000 to 185,000 pace economists say is needed to keep up with population growth.
Not everyone is as sanguine. While economists at Canada major banks have consistently predicted a softening in prices and a slowing in Nike Uptempo Flax On Feet
would emphasize that while a 10 % correction sounds scary, in actual fact, this would be a healthy outcome. house prices crashed as a mortgage crisis unraveled in 2008, triggering a financial crisis and leaving a trail of foreclosures, negative equity and financial hardship for millions of people. have only begun to rise again this year.
housing starts, some independent analysts see a very hard landing ahead.
been building above 200,0000 for several years. And we know we been building above demographic requirements because the evidence is in the inventory data it high, it not low, said Madani.
Prices, which lag sales, have started to come down as well. Prices for existing homes dipped 0.4% in September from August, according the Teranet National Bank Composite House Price Index, but remain 3.6% higher than a year earlier.
That 17.5% drop in new homebuilding will take a bite out of Canada economic growth, fueled by the housing sector, consumer spending and government stimulus since growth slowed in 2009. But a strengthening global economy Nike Air Max Uptempo 95 White
market for years.
Housing starts, which notched a seasonally adjusted annual rate of 222,945 units in the third quarter, will decline to 200,500 in the fourth quarter, 186,900 in the first quarter of 2013, and 184,000 in the second quarter of next year.
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