Modest housing growth forecast for 2012

Housing markets in Edmonton and Alberta will show modest growth next year, forecasters with the Canada Mortgage Housing Corp. predicted on Thursday.


"We're expecting to see improvements, but fairly moderate improvements," said Richard Goatcher, a senior market analyst with the Crown corporation.


"We saw activity really start to slow down in '08 and '09, and then last year was a year of improvements. We expect those improvements to continue."


Goatcher presented the CMHC forecast to a conference of real estate agents and civic employees at the Delta Edmonton South hotel.


CMHC predicts three-per-cent growth in resales, 11-per-cent growth in housing starts and 2.4-per-cent growth in average price for a house in Edmonton next year. However, CMHC anticipates listings of new houses to contract by 4.6 per cent over the same period.


The cautious optimism comes despite global economic uncertainty and a more modest overall out-look for Canada. Goatcher credits Alberta's energy sector with powering the province's economy and housing market.


"We're in a good economic situation here in the capital region, despite the headlines around the world about financial problems," he said. "That's largely because of the investments in the energy sector that are helping to support growth across the region."


Lai Sing Louie, a regional economist with CMHC, echoed Goatcher's view. "Overall, the economy is expanding and we expect it to continue to expand next year," he said. Louie predicted real GDP growth of 3.1 per cent in Alberta next year - a full percentage point above the CMHC's forecast for all of Canada.


That growth, according to Louie, will draw more people to Alberta, boosting demand for housing. "Housing market conditions are improving," he said. "We're expecting to see more sales, more housing starts next year, and prices rising a little bit quicker."


CMHC forecasts call for 15.3-per-cent annual growth in new housing starts for Alberta in 2012, and the average price of a resale to grow 2.3 per cent to $362,700.


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