Canada Mortgage and Housing Corporation (CMHC)’s national housing outlook suggests housing starts, which have declined the last two years, will stabilize over the next two.
According to the CMCH’s 2020 Housing Market Outlook, which was released on October 24, there will be an increase in home sales and prices due to income and population growth.
“Housing starts are projected to stabilize in 2020 and 2021 at levels in line with long-run averages,” Bob Dugan, CMHC’s chief economist, said in a news release.
“This follows two years of declines from elevated levels in 2017. Resale activity and house prices are expected to fully recover from recent declines,” he continued.
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According to CMHC, 2019 will see a second consecutive decline for housing starts, before they stable out in 2020 and 2021. Starts for single-detached housing types will remain below the peaks observed in 2017, while starts for multi-unit housing types will remain below the peaks from 2018.
Existing home sales are expected to stay near their 2018 numbers until the end of 2019, at which time they will begin to increase through 2020 and 2021, which will offset the declines seen in 2016.
Further, positive price growth is expected to resume in 2020 and 2021, driving the average price above its 2017 level by the end of the forecast horizon. However, an increase in household disposable income growth and rates of household formation will support the price increase.