CMHC expects housing market to recover in next two years after declines

Home sales are expected to increase in the next two years, with prices also going up

Canada’s federal housing agency expects the housing market to recover in the next two years after declines in home building, sales and prices.

Canada Mortgage and Housing Corp. said in its annual market outlook Thursday that housing starts should come in at around 200,000 units in the next two years. That’s above the roughly 194,000 expected this year but still well below the decade-high of almost 220,000 units in 2017.

“Housing starts are projected to stabilize in 2020 and 2021 at levels in line with long-run averages. This follows two years of declines from elevated levels in 2017,” CMHC chief economist Bob Dugan said in the report.

Home sales, which have been dropping since 2016, are expected to increase in the next two years, with prices also going up, Dugan said.

READ MORE: UN report highlights ‘abhorrent’ housing conditions for Indigenous people

“Resale activity and house prices are expected to fully recover from recent declines, supported by growth in income and population.”

Home sales reached 533,353 in 2016, but fell to 452,189 last year. By 2021 sales could reach somewhere between 498,500 and 519,100, the agency said.

The average home price hit $511,830 in 2017, but it’s expected to come in at around $488,000 this year. CHMC said the average price could be between $539,800 and $569,600 by 2021.

Ontario and British Columbia are expected to lead in sales growth as disposable income grows above the national average, while price growth will be strongest in Ontario and Quebec and somewhat B.C.

The growth in sales and price is expected to come as economic growth recovers in the next two years, and the population is expected to grow to 38.3 million by 2021. That would be an additional 713,000 people from the 2019 population, and an increase of 2.17 million people from 2016.

CMHC warned that trade tensions and high household debt still present risks to the economy and housing market stability. It also said higher interest rates or a rise in unemployment could hit already strained budgets and put pressure on housing activity.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

WATCH: Washboard Union opens bull riding weekend in Sylvan Lake

Country artists Jason Benoit and Washboard Union played to a full audience Nov. 14

Alberta Justice Minister advocates UCP rural crime plan

Expanded property rights, more power to peace officers, demonetizing scrap mental part of UCP plan

Sylvan Lake artist to perform at BRC cabaret

Dylan Gillett will take to the stage Friday evening after the bull riders have finished

Wolf Creek Public Schools hit by budget cuts, insurance spike

WCPS is facing a sizable shortfall after a $1.8 million cut and $1 million insurance hike

Sylvan Lake Wranglers earn another win at home

The Wranglers defeated the Ponoka Stampeders 3-1, Nov. 10

Listening to Christmas music too early could affect your mental health

Linda Blair, a clinical psychologist, says preemptive Christmas music can trigger anxiety

Rebels ride 3-goal first period to 4-3 win over Brandon

Goaltender Byron Fancy with key saves in third period to save game

Supreme Court of Canada dismisses murder appeals in 2013 Calgary swarming death

Assmar Shlah and Franz Cabrera were convicted in 2016 of second-degree murder

One year on, most oil-and-gas bailout money has moved, federal government says

Sweden’s central bank says it has sold its Alberta-government issued bonds

Ski resorts selling mountain water is a risky move, critics say

Alberta allowed ski resort in Kananaskis Country to sell about 50 million litres to third party

Sportsnet looks at new options for Coach’s Corner time slot, post-Don Cherry

Spokesperson says Hall of Fame feature on tap this weekend after co-host’s firing

CN Rail confirms job cuts as weakening economy cuts into freight volumes

Railroad also said it was affected by a slowdown in the B.C.’s forestry sector

New case of vaping-related illness in Quebec brings national total to 8

Quebec health minister considering tightening the rules around vaping products

Most Read