Housing Market Faces Uncertainty

Record levels of international immigration, low interest rates, and an increasingly middle-aged Millennial cohort have together fuelled a strong household formation and housing demand in Canada, says a survey from the Canadian Real Estate Association (CREA). COVID-19 only enforced trends that were already present and many other existing owners who may have made their homes available to buy in a normal year simply did not, driving prices to drastically rise while supply fell further to reach all-time lows. However, the urgency and frenzy of earlier in 2021 have started to fade and the market has settled down a bit, says the survey. In fact, most housing market indicators appear to be levelling off at a cruising altitude somewhere in between pre- and peak-pandemic levels, except end-of-month property sales which continue to hit lows. National home sales are forecast to fall by 12.1 per cent in 2022. However, there remains elements of uncertainty of the housing market including the mass vaccination of society with migration and international immigration uncertainties and the outcome of the federal election and how parties decide to address the housing demand.