CMHC expects housing market to recover in next two years after declines

Home sales are expected to increase in the next two years, with prices also going up

Canada’s federal housing agency expects the housing market to recover in the next two years after declines in home building, sales and prices.

Canada Mortgage and Housing Corp. said in its annual market outlook Thursday that housing starts should come in at around 200,000 units in the next two years. That’s above the roughly 194,000 expected this year but still well below the decade-high of almost 220,000 units in 2017.

“Housing starts are projected to stabilize in 2020 and 2021 at levels in line with long-run averages. This follows two years of declines from elevated levels in 2017,” CMHC chief economist Bob Dugan said in the report.

Home sales, which have been dropping since 2016, are expected to increase in the next two years, with prices also going up, Dugan said.

READ MORE: UN report highlights ‘abhorrent’ housing conditions for Indigenous people

“Resale activity and house prices are expected to fully recover from recent declines, supported by growth in income and population.”

Home sales reached 533,353 in 2016, but fell to 452,189 last year. By 2021 sales could reach somewhere between 498,500 and 519,100, the agency said.

The average home price hit $511,830 in 2017, but it’s expected to come in at around $488,000 this year. CHMC said the average price could be between $539,800 and $569,600 by 2021.

Ontario and British Columbia are expected to lead in sales growth as disposable income grows above the national average, while price growth will be strongest in Ontario and Quebec and somewhat B.C.

The growth in sales and price is expected to come as economic growth recovers in the next two years, and the population is expected to grow to 38.3 million by 2021. That would be an additional 713,000 people from the 2019 population, and an increase of 2.17 million people from 2016.

CMHC warned that trade tensions and high household debt still present risks to the economy and housing market stability. It also said higher interest rates or a rise in unemployment could hit already strained budgets and put pressure on housing activity.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

WildSafeBC hires new co-ordinator for Cariboo region

Mareike Moore said the main message is keeping wildlife wild, communities safe

CITY HALL: Investing in our transition strategy

City council news from Mayor Bob Simpson

Family bond strengthened through mask-making

A B.C. Indigenous youth is making face masks for firefighters after having made some for family

Indigenous company to launch First Nations banking app

A national release of the OneFeather APP anticipated no later than this summer

FOREST INK: Ithaka Institute in Switzerland continues with biochar research

My experience to date with biochar was mainly its use as a… Continue reading

VIDEO: A Vancouver Island black bear takes weekend nap in eagle tree

Videos captured by Terry Eissfeldt shows the bear arriving Saturday night and sleeping in on Sunday

George Floyd asphyxiated by sustained pressure: family autopsy

Death sparked a wave of protests across the U.S. and abroad

COVID-19: B.C. commercial landlords can’t evict if they decline rent assistance

Emergency order ‘incentive’ for federal program, Carole James says

Investigators probe death of CN employee at Surrey rail yard

Transportation Safety Board is investigating an ‘occurrence that took place during switching operations’

Trans Mountain starts B.C. leg of pipeline twinning project

Mostly finished in Alberta, Burnaby terminal expanding

NDP getting COVID-19 wage subsidy ‘indirectly,’ B.C. Liberal leader says

Andrew Wilkinson says he’s heard no concerns from public

Love flourishes at Peace Arch Park, but COVID-19 concerns loom

South Surrey park becomes only place for international couples to meet

Most Read