To date in 2010 we have seen robust sales activity and increased prices. As of March 2010, prices for apartment condo and townhouses were up 2% and 3% above previous peak levels respectively, with prices for single detached homes up 7% from the previous peak. These trends are not expected to continue into the coming months as sales activity moderates and price increases are expect to slow.  

CMHC forecasts that we will see a more balanced housing market in the second half of 2010,  as MLS(R) listings increase and sales begin to slow. Sales are expected to slow down in the coming months and remain flat in 2011. 

Although home ownership demand will be strengthened by improving local economic conditions and steady population growth, higher mortgage rates and the new mortgage regulations will act to dampen demand from buyers in the later half of this year. 

We are already seeing a slower pace of sales this year compared to what we saw last fall. This is expected, as much of the pent-up demand that built up from 2008 was satisfied in the second half of 2009 as buyers took advantage of record low mortgage rates and discounted prices. CMHC predicts we will see a 3% decline in annual sales for this year and next. 

During this time we expect to see more homes listed for sale as sellers try to take advantage of the price increases we have seen over the past year. 

This translates to good news for buyers. Although we don't expect to experience a 'Buyer's Market' as we did this time last year, buyers will now have a larger selection of homes to choose from and more time to make their decision. In addition we expect to see less multiple offers on properties, which will be a relief for buyers trying to secure their dream home.

What about prices?

We expect to see the pace of price growth to decline over the next year and a half as the market settles. CMHC predicts that MLS prices will increase 11% in 2010, with the majority of the growth being accounted for by the high prices and robust sales we saw in the first half of this year. In 2011 the price growth is expected to be a mere 3%. 

Read the full CMHC Spring 2010 Housing Market Outlook>>