According to a market report, we are are going to be seeing a decline in single-detached housing starts in the coming years.

The Canada Mortgage and Housing Corporation’s (CMHC) Fall 2017 Housing Market Outlook report says that after a rise in residential construction in 2017, housing starts are projected to decline by 2019.

“We continue to see a high degree of vulnerability in Canada’s housing market, fuelled by moderate overvaluation and price acceleration. House price growth continues to outpace economic fundamentals like household income and population growth,” says Bob Dugan, Chief Economist at CMHC. 

“In 2018 and into 2019, housing starts are projected to decline while house prices should increase over the forecast horizon, but at a slower rate than in the past four years.”

The report predicts low-rise starts will decline from 75,900 and 77,100 in 2017 to between 66,200 and 68,400 in 2018 and 66,900 and 68,900 in 2019. Although a decrease is expected, numbers should remain above historical levels.

While housing starts are expected to decrease, mortgage rates are expected to rise. According to the report, this increase is consistent with the expected improvement in domestic economic conditions and the predicted increase in world interest rates.