The average annual price is still expected to end the year lower than 2022
The decline in average home prices that’s gripped Canada’s housing market over the last 12 months is expected to end this summer – although the overall yearly average price will probably be lower than it was at the end of 2022, according to the national housing agency.
Canada Mortgage and Housing Corporation (CMHC) said in its latest Housing Market Outlook that prices should tick upwards from mid-2023, a trend that could see affordability slip further out of reach for would-be homeowners as higher interest rates and a chronic lack of housing supply continue to take their toll.
With CMHC also anticipating housing starts to continue falling and remain “well below” their pace of the past two years, improvement on the inventory front isn’t likely to arrive until at least 2024, particularly with developers currently burdened by higher construction and borrowing costs.
“These levels of housing supply will be insufficient to meet demand growth and will continue to put affordability pressures on Canadian households,” the agency said in remarks accompanying its forecast.
Rental demand is expected to surge as a result of those housing market affordability challenges, which CMHC chief economist Bob Dugan said would persist thanks to overall housing demand “well outpacing” supply of new homes.
