The Canada Mortgage and Housing Corporation (CMHC) is projecting that the demand for housing will continue to decline through 2020.
According to a special edition of the Housing Market Outlook, housing starts, sales, and prices for Canada’s major housing markets are likely to remain below their pre-COVID-19 levels for the foreseeable future.
This is largely due to income declines, uncertainty over the future trajectory of the virus and employment, and income conditions. As a result, the precise timing and speed of the recovery in major markets is highly uncertain and will vary considerably.
“COVD-19 has had unprecedented impacts on Canada’s urban centres. Short-term uncertainty will lead to severe declines in sales activity and in new construction,” Aled ab Iorwerth, deputy chief economist for the CMHC, said in a news release.
“As the virus is overcome, cities will bounce back but there is significant uncertainty with respect to the path and timing of the recovery,” he continued.
According to the findings, housing prices are projected to drop due to a drop in demand for the market.
Sales and construction have also declined and will continue to do so across Canada’s major markets, while resale activity and average house prices will fall across all markets. However, the rate and magnitude of declines of both will vary.
Meanwhile, the rental market is projected to see an increase in rental vacancies due to a decline in immigration as well as a surplus of buildings under construction.