Canada's housing agency is forecasting Kamloops - buoyed by employment growth - will see increasing new home construction, stable prices and increasing sales into 2013.

Canada Mortgage and Housing Corp. released its third-quarter outlook Tuesday highlighting markets around the province.

"In terms of performance Kamloops is one of the strongest price-wise," said Carol Frketich, a regional economist with Canada Mortgage and Housing Corp.

The average multiple-listings service price rose by 4.5 per cent in the second quarter of the year compared to the same period last year. That increase was the highest of seven B.C. markets, including Nanaimo, Prince George, Abbotsford, Kelowna, Vancouver and Victoria.

Sales during the same period were down about 10 per cent.

The agency is forecasting resales will increase about three per cent by the end of the year, with prices remaining stable through the end of 2013.

"Basically for Kamloops it's a stable resale market," Frketich said.

"There's a couple factors: There's improvement in the labour market in the second quarter. You have stronger employment growth and lower unemployment than last year."

On the new building side, the Crown corporation is forecasting construction of 500 homes by the end of this year, down two per cent from 2011. It predicts that number will surge by 15 per cent to 575 by the end of 2013, with the majority of building in single-family construction.

Matt McCurrach, vice-president of the local chapter of Canadian Homebuilders Association, said the forecasted increase would be good news for the industry.

"There's definitely a lot of people looking in the last month and more serious buyers seem to be coming around a second and third time."

McCurrach's company is building a high-end development in Mount Dufferin. He said some buyers are insulated from today's uncertain economy.

"High-end lot sales are fairly strong. For people who have money it's a good time to buy or build. They're not shy right now."

In the first seven months of the year construction started on 317 units in Kamloops, split nearly evenly by single- and multi-family construction.

cfortems@kamloopsnews.ca