Mortgage Watch

Housing starts are expected to decline this year but recovery slightly in 2010 as the Canadian economy begins to recover, according to Canada Mortgage and Housing Corporation.

The federal agency said Tuesday that new construction should fall to 141,900 units in 2009, but increase to 150,300 units for 2010,

"The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007," Bob Dugan, CMHC's chief economist, said in agency's second-quarter outlook.

"However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period."

Meanwhile, CMHC said existing home sales would fall to 357,800 units in 2009 from 433,990 the previous year but rise to 386,100 units in 2010.

The average sales price is expected to decline to $283,100 in this year before stabilizing in 2010, it said.

Provincial housing starts (2008 / 2009 / 2010):

Newfoundland and Labrador 3,261 / 2,675 / 2,975

Prince Edward Island 712 / 575 / 625

Nova Scotia 3,982 / 3,100 / 3,425

New Brunswick 4,274 / 3,475 / 3,650

Quebec 47,901 / 40,000 / 41,350

Ontario 75,076 / 51,325 / 52,300

Manitoba 5,537 / 3,950 / 4,250

Saskatchewan 6,828 / 3,400 / 3,850

Alberta 29,164 / 13,700 / 16,200

British Columbia 34,321 / 19,725 / 21,700