The latest housing Market Outlook Report shows the level of Canadian home sales and the pace of price growth in 2022 will remain elevated compared to long run averages.
The Canada Mortgage and Housing Corporation (CMHC) report suggested sales and prices will moderate from their respective 2021 peaks. It explained that over the 2023-to-2024 period, these trends will continue, thanks to the impact of higher mortgage rates and lower housing affordability on housing demand. The CMHC said housing sales and price growth will fall more in line with historical averages by late 2023 or early 2024, but elevated price levels will persist since price growth will remain positive. These factors will place greater pressure on the affordability of entering homeownership.
The report said recent rental market trends are also expected to continue over the forecast period. Downward pressure on rental vacancy rates and upward pressure on average rents will likely continue to affect rental affordability. It said housing starts will also moderate from 2021 highs but remain above historical averages, reflecting expected support for new home construction to address current and growing housing supply gaps.
"We expect the growth in prices, sales levels and housing starts to moderate from recent highs, but remain elevated in 2022. Improving levels of employment and immigration are expected to be key factors, as the impact of pandemic restrictions continue to recede. In 2023 and 2024, the growth in prices will trend closer to long-run averages, with sales and starts activity expected to remain above 5- and 10-year averages. Price growth will likely continue to be led by markets with low listings, including Vancouver, Toronto, and Montreal," said Bob Dugan, Chief Economist for CMHC.
