Canada's housing markets to feel pandemic impacts until 2022

Marco Green
May 30, 2020

Canada Mortgage and Housing Corp. says it expects home prices and sales to decline substantially this year and still won't have recovered by the end of 2022.

The CMHC has released their Housing Market Outlook - Special Edition on Wednesday, which forecasts housing market activity for this year and next.

"Following large declines in 2020, housing starts, sales, and prices are expected to start to recover by mid-2021 as pandemic containment measures are lifted and economic conditions gradually improve", Bob Dugan, CMHC's chief economist, said. In the faster recovery scenario, prices could start to recover by mid-2021, while a slower recovery prices might not be back to pre-COVID-19 levels at the end of 2022. "The precise timing and speed of the recovery is highly uncertain because the virus's future path is not yet known", he continued.

CMHC says housing prices won’t have fully recovered by end of 2022
Housing market expected to experience declines throughout rest of 2020 in Mississauga

House prices in Canada could fall by up to 18 per cent in the fallout of the COVID-19 pandemic, a new forecast suggests, but some observers believe the London market will fare better. CIBC said in early May that it expects home prices to have fallen between 5% and 10% compared with 2019 levels before starting to recover later this year.

Pressure on prices will come as sales drop, with an expected 19% to 29% decline in sales from pre-COVID levels this year as job losses affect buying decisions. The pandemic's global effects have contributed to a decreased demand for oil and greater excess supply globally, with declining oil sector investment, employment and oil prices placing additional pressures on those province's housing markets. Some regions which are heavily dependent on commodity revenue such as oil, could see home prices drop by up to 25%.

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