Housing starts are expected to decline to 141,900 for 2009, but increase to 150,300 for 2010, according to Canada Mortgage and Housing Corp.’s (CMHC) second quarter outlook, released Tuesday.

“The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007,” says Bob Dugan, chief economist for CMHC.

“However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period,” Duggan says.

Existing home sales, as measured by the Multiple Listing Service, are expected to decline 18% to 357,800 units in 2009 from 433,990 in 2008 , but increase to 386,100 units in 2010.

The average MLS price is also expected to decrease to $283,100 in 2009 and to stabilize in 2010.

IE