Apartment starts in Ottawa in 2016 are expected to fall below 1,000 units for the first time in six years, according to a Conference Board of Canada report released Wednesday.
The board’s Summer 2015 Metropolitan Condo Outlook is predicting the decline, despite forecasting slightly better economic growth and job creation prospects over the next year.
“Resale transactions are expected to rise by a modest 2.5 per cent in 2016, with prices up a relatively understated 1.3 per cent,” it said.
The report, released by mortgage insurance firm Genworth Canada, said sluggish national GDP and job growth across the country will have a “moderating effect” on the national condo market.
“The report findings continue to align with what we have described as a soft landing for Canada’s condo market for 2015,” Genworth Canada president and CEO Stuart Levings said in a statement. “While conditions vary across markets, with greater cooling in oil-exposed regions, overall, the numbers point towards balanced resale activity which will support the safety and soundness of the condo market.”
Robin Wiebe, a senior economist with the conference board, said national house prices have been driven upward largely by single- and semi-detached homes and row units in Toronto and Vancouver.
“Price increases for apartments have been much less frothy,” Mr. Wiebe said in a statement. “Accordingly, nowhere do we see significant overvaluation of condo prices.”