Calgary’s housing market is expected to rebound in 2010 after housing starts, MLS sales and average sale prices continue to fall this year, says a report by Canada Mortgage and Housing Corp.

The Housing Market Outlook, released Thursday, forecast housing starts in the Calgary census metropolitan area to drop by 51.9 per cent in 2009 from the previous year to 5,500 units but to increase by 12.7 per cent in 2010 to 6,200 units.

In the Calgary region, MLS sales are expected to fall by 13.6 per cent to 20,000 units this year and the average sale price will dip by 6.2 per cent to $380,000.

However, the CMHC forecast said MLS sales will increase by 10 per cent in 2010 from the year before to 22,000 units and the average sale price will also rise by 2.6 per cent next year to $390,000.

In Calgary, there was potential that 2009 would show some strength relative to the previous year, but in about the fourth quarter of 2008 the city started to see the impact of a slowdown in the world economy, said Lai Sing Louie, senior market analyst in Calgary for CMHC.

Louie said the Calgary region has seen 32,200 full-time jobs disappear in the past four months, but at the same time it has gained 27,400 part-time jobs.
“Really, the full-time jobs are the ones that allow people to purchase a home more so than a part-time job,” said Louie.

But with governments spending to stimulate the economy, he said, there are forecasts things will turn around in the latter part of 2009 and into 2010.

“That should allow housing markets to expand again,” said Louie.

“There is a sense that there is an erosion in housing prices. So for some people there’s no sense of urgency to buy right now, but at some point in time people will come back into the marketplace and start buying. We expect prices to firm up in 2010.”

The Calgary CMA includes the city, Airdrie, the Municipal District of Rocky View, Chestermere, Cochrane, Irricana, Beiseker and Crossfield.

Louie said one of the fundamental demands of housing is household formation and Calgary’s population grew by more than two per cent this past year. At some point that household formation will translate into more housing sales, he said.

At the provincial level, CMHC is forecasting housing starts to dip by 34.2 per cent this year to 19,200 units but rebound by 14.6 per cent in 2010 to 22,000 units.