PEI

Immigration will continue to drive housing market, says CMHC

Investment in new housing in the Charlottetown area will remain strong over the next two years, according to the fall forecast from the Canada Mortgage and Housing Corporation.

Labour shortage expected to slow housing starts

Historically high rates of immigration are driving the housing market. (Steve Bruce/CBC)

Investment in new housing in the Charlottetown area will remain strong over the next two years, according to the fall forecast from the Canada Mortgage and Housing Corporation.

The market will be held back not so much by demand, but by a shortage of skilled labour to build new housing, the agency says.

That labour constraint will have the biggest impact on single-family home starts, says CMHC, as demand for apartment housing grows and building accelerates in that sector. Those factors will combine to drive up the average house price about 25 per cent over the three years of the forecast, from $226,868 in 2016 to about $285,000 in 2019.

Apartment vacancy rates in Charlottetown are expected to fall below 0.5 per cent. Higher rents will follow according to the report, with the average for a two-bedroom going from $872 in 2016 to $975 in 2019.

A growing population driven by immigration will be the main driver in increased demand.

Historically high rates of immigration are expected to continue on the Island, and recent trends are for almost two thirds of immigrants to P.E.I. to settle in Charlottetown.

Downsizing seniors and international students are also expected increase demand in multiple-unit housing.

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