CMHC releases annual housing market outlook
November 8, 2018
Canada Mortgage and Housing Corp. (CMHC) released its annual housing market outlook on Tuesday, which predicts that housing starts and sales will both see a decline in 2019 and 2020.
Income, employment, and household formation are expected to stimulate new residential construction, but at a slower pace due to a decline in GDP, household income and net international migration.
In addition, single and multi-detached housing starts are predicted to decline to a range of 193,700 to 204,500. Sales between 478,400 and 497,400 units and prices ranging from $501,400 to $521,600 are also predicted.
A variety of factors such as limited lot availability, and elevated price and borrowing costs influence the decline in single-detached housing starts. Meanwhile, multi-unit housing starts are predicted to decline due to a smaller growth in population aged 25-34 which holds a large portion of the first-time buyers pool.
According to the report, CMHC also believes global trade tensions pose a risk to the Canadian economy and therefore could have a negative impact on the housing market despite the recent United States-Mexico-Canada Agreement, which “should raise business confidence, investment, employment, and incomes.”
CMHC says that MLS® price growth will be “modest,” but warned that Canadian households that are heavily indebted are still vulnerable.
In Saskatchewan, market conditions currently favour the buyer, but “are expected to gradually become more balanced with gradual growth in economic and demographic fundamentals,” the report states.