Housing Markets Will Begin To Recover Mid-2021

Economic uncertainty stemming from containment measures of COVID-19 and falling oil prices is affecting all sectors of Canada’s real estate market, says the Canada Mortgage and Housing Corporation (CMHC). Its report, ‘The Housing Market Outlook - Special Edition’ (HMO) says the housing market will see declines in 2020 and should start to improve by this time next year. However, housing starts, sales, and prices are likely to stay below their pre-COVID-19 levels into 2022. Severe disruptions to the economy due to the COVID-19 pandemic have placed unprecedented pressures on employment, incomes, migration, and financial markets, while lower oil prices are likely to exacerbate declines in Canada's oil-producing provinces. Housing prices could fall by as much as nine to 18 per cent from first quarter levels this year before they begin to recover in 2021. As well, restrictions on construction activity are leading to a sharp decline in housing starts. The forecast indicates that housing starts could decline by as much as 75 per cent from the first quarter level before starting to recover by the second half of 2021. Home sales in Canada could experience as much as a 29 per cent decline from pre-COVID-19 levels before slowly recovering post 2022.