Housing market activity in Ontario is forecast to rise into the first half of 2011 after declining sharply from an early year record setting pace. A gradual improvement in economic growth, employment levels and continuing low mortgage rates will boost 2011 sales slightly above 2010 levels by 5%, before pulling back in 2012. Home prices are forecast to reach a new record high in 2011, before decreasing slightly in the latter half of the year.
Higher resale market demand will drive new home builders to increase housing starts by 9% to 66,000 units in 2011, and a further 7% in 2012. However, new home construction levels will remain modest compared to activity observed over the last decade, contributing to potential undersupply in the housing market near the latter part of 2012.