Canada Mortgage and Housing Corporation expects average home prices to edge lower through 2010, then rise modestly in 2011.Canada Mortgage and Housing Corporation expects average home prices to edge lower through 2010, then rise modestly in 2011. (CBC)

The growth rate for housing construction will slow over the last half of the year, Canada Mortgage and Housing Corporation said Tuesday in its latest quarterly outlook.

The federal agency also forecast the rate of housing starts in 2011 will stabilize and grow at the same rate as the population.

CMHC predicted starts for all of 2010 to be in the range of 170,200 to 198,400, up from 149,081 in 2009 but down from 2008's total of 211,056.

"Housing starts will moderate in the coming months as activity becomes more in line with long-term demographic fundamentals," CMHC chief economist Bob Dugan said in a release.

Housing starts (estimated)
2010 2011
Nfld. and Labrador 3,350 3,150
Prince Edward Island 700 695
Nova Scotia 3,950 3,950
New Brunswick 3,700 3,650
Quebec 49,425 42,600
Ontario 61,525 56,700
Manitoba 5,125 4,950
Saskatchewan 4,725 4,900
Alberta 28,450 30,700
British Columbia 23,900 25,700
Canada 184,900 176,900
(Source: CMHC)

In 2011, housing starts will be in the range of 146,900 to 210,500 units, it said.

Dugan also predicted a balance between the supply and demand of previously owned homes over the next two years as sales slow and the number of houses for sale remains more than ample.

Existing home sales will be in the range of 450,000 to 485,700 in 2010.

CMHC predicted sales in 2011 will likely fall, likely to a range of between 425,000 and 490,700 units.

It also expects average prices to edge lower through 2010, averaging $337,450 in the last three months of the year, compared with a peak of $341,969 in the first quarter, then rise modestly in 2011 to an average of $342,200.

With files from The Canadian Press