The Canada Mortgage and Housing Corp. said there will be 5,400 new home starts next year, down from an expected 6,400 in 2012.
The slowdown will be particularly pronounced during the first six months of the year, said Sandra Pérez Torres, a senior market analyst with CMHC. However that will pick up again during the second half while employment in the region continues to rise.
“As uncertainty in the region will start dissipating, we’ll start seeing more sales and more housing construction starting in the late third quarter and into the fourth quarter of 2013,” said Ms. Torres.
Prices will continue to rise during the first half of next year but at a slower rate. That means new homes will still be affordable for first-time buyers while existing homeowners will also have enough incentive to sell, according to a CMHC press release.
The slowdown in the number of housing units constructed will be in part a levelling-off of the apartment market after a robust year in 2012.
Construction of apartment units grew from 1,873 in 2011 to 2,800 in 2012, while the number of single family, semi-detached and row house homes all declined.