The national housing agency said improving employment and immigration are set to play a crucial role
Activity and price growth in Canada’s housing market are anticipated to remain elevated throughout 2022, although the blistering pace of last year is expected to slow, the national housing agency has said.
Canada Mortgage and Housing Corporation (CMHC) said in its Housing Market Outlook, published on Thursday, that price appreciation and sales in the market would likely level out by the end of 2023 or early 2024, falling in line with historical averages.
Still, it said that prices were likely to remain elevated as positive price growth continues – and sounded a sombre note on affordability, which is projected to decline further as rising mortgage rates collide with increasing home prices.
Unsurprisingly, price appreciation is likely to remain most pronounced in some of the country’s hottest markets such as Toronto, Vancouver, Montreal and Ottawa, the agency said, with low supply in those cities set to continue driving prices up.
“Supply constraints on construction will continue to impact major centres and especially Vancouver and Toronto, highlighting the central role of housing supply in determining affordability,” CMHC said in a release.
In the Greater Toronto Area (GTA), one of Canada’s most frenzied markets, homebuying activity should moderate, according to CMHC, with total housing starts also set to level out throughout this year – and only beginning to increase in 2024.
Meanwhile, Vancouver is expected to see strong immigration growth in the coming years, although the report indicated that labour shortages are likely to persist, with high construction costs also thwarting many would-be builders.
