This should be an interesting prediction to watch. The CMHC has put on their happy hats and made this forecast:
“In 2010, a pickup in home sales, a stronger domestic economy with income growth and low mortgage rates will lead to an increase in new home construction. Greater Vancouver tends to lead the other markets and that’s what we’re now seeing. In 2010, it will spread to the rest of the province. This will prompt builders to start more homes to meet a growing need for housing.”
Now remember, these are the guys handing out money to buyers whom banks wouldn’t otherwise lend to without a higher risk premium. They have nearly doubled their mortgage insurance cap over the last two years. When Fanny May and Freddy Mac tried the ‘free loans for everyone program’ down south it didn’t turn out so well, but in Canada we do things differently. Will the CMHC be able to keep pumping enough tax-payer backed credit into the real estate market to make this forecast come true or will the whole house-of-cards come tumbling down in crash part deux?