A report from the Canada Mortgage and Housing Corporation forecasts lower housing starts, sales and prices for the country’s major markets – and a slower rebound in Vancouver than in some other cities, reported CTV News.
The latest outlook, released Tuesday morning, looks at the impacts of the COVID-19 pandemic so far, and estimates when things may return to normal. Scroll down to read through the full report, including information on other markets.
Senior analysts Braden Batch and Eric Bond wrote that housing starts in B.C.’s most populous city are expected to “contract significantly in the immediate future.”
While B.C.’s approach to the novel coronavirus pandemic has allowed for construction, new builds will be challenged by reduced migration from Canada and abroad, the Vancouver market forecast says.
Additional factors impacting housing starts are increased unemployment and uncertainty regarding long-term economic impacts of COVID-19.
Prior to the pandemic, the report says, the construction industry had been operating at or near capacity. Still, the CMHC said, there was a decline in construction activity even before the pandemic.
The corporation expects things to pick up again toward the end of the year.
CMHC expects a contraction of the resale market, but forecasts a recovery period starting next year.
Resale activity was “largely suspended” early on in the pandemic, and listings declined at that time as well.
Sales had slowed down in 2018-19, but were starting to pick up again before the pandemic. COVID-19 is expected to delay the recovery, the CMHC report says.
And those who are looking to sell may be getting less for their homes for the time being.
“A price decline will occur, but it will take place more gradually over the next two years before showing some recovery in late 2022,” the report says.
The CMHC report forecasts average house prices declining due to residents’ reduced incomes.
There’s been an uneven impact on buyers of condos and detached houses, the corporation says, so there’s “additional uncertainty for the path of the average price decline.”
While most markets are expected to see homes selling for less, CMHC says prices may return to normal earlier in Toronto, Montreal and Ottawa. Vancouver, Edmonton and Calgary should expect a slower rise back to pre-pandemic prices, it says.