Expert says housing likely to slow in 2008
While more people are building homes in Ottawa now as compared to this time last year, it’s not a trend that’s expected to last, a housing expert said yesterday.
Pascal-Yvan Pelletier, a senior analyst with Canada Mortgage and Housing Corporation (CMHC), said the number of housing starts here has gone up three per cent so far in 2007 as compared with the same period in 2006.
Housing starts in Ottawa are also 27-per-cent higher in August 2007 than August 2006, according to CMHC statistics released yesterday.
The reason for this are the favourable economic factors in the city, Pelletier said.
“Employment is good,” explained Pelletier. “And when you have a job you are more likely to build a house or go for a bigger house.”
Also, the mortgage rate is more affordable now than in the late 90s. More people, both newcomers and current residents, are looking to build single-family homes, he said.
The average price of a new single-detached home is just over $400,000, meaning that buyers are usually people who have already put a home on the resale market rather than first-time homeowners, Pelletier said.
“Overall, the building of housing is up and points to a fairly good amount of construction in Ottawa,” said Pelletier.
“It cannot keep rising forever, of course. Probably in 2008, we will see a slowdown of new construction. We are at the top of the cycle which means the pressure of the price will slow down activity on the market.”
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