CMHC Forecasts That Canada’s Housing Market Will Slow In 2019 and 2020

Galtero Lara
Noviembre 8, 2018

Our outlook is for the pace of price growth to slow over the forecast horizon.

Part of that slowdown could come from an increase in condo sales over single-detached homes and buyers have more options to choose from as supply is introduced over the forecast time frame. Buyers' market conditions are expected to slowly subside and this will help stabilize housing prices in 2019.

"On a year-to-date basis, MLS sales have decreased 13.5 per cent from September 2017".

The average MLS sale price in Alberta was $398,228. It is then expected to climb at a slower rate in 2019, to between $706,500 and $718,800, and then edge up again to somewhere between $710,000 and $722,400 in 2020.

Further gains are expected in 2020 as economic conditions improve, according to CMHC, however it cautioned rising mortgage rates will remain a constraining factor on resale activity. This is in part due to higher mortgage rates, slower growth within the population and economy, and changes to housing policies pushing MLS Sales down 21 per cent in the first half of 2018, compared to the same time past year.

The report predicts opposing forces will push and pull the demand for housing in Calgary over the next two years. "Units already under construction will expand the universe of objective built rental significantly". Full-time employment has still not returned to the level reached back in 2015.

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However, this market is expected to remain tight across Metro Vancouver, as rents continue increasing faster than inflation, on average.

"In Alberta's new home market, single-detached inventories have been trending higher in 2018 prompting builders to slow production". Vacancy rates are forecast at 7.7 per cent for 2018, before declining to 7.0 and 6.5 per cent in 2019 and 2020 respectively. Prices are anticipated to range between $501,400 and $521,600.

CMHC expects MLS resales across drop from 103,759 units in 2017 to between 76,600 and 83,400 sales this year. Sales are then expect to increase somewhat in 2019 to between 79,100 and 87,900 units, and then in 2020 to range between 81,500 and 92,500 sales. They are not expected to return to the 100,000 mark seen in 2016 and 2017. It is then expected to range from between $681,800 and $756,200 in 2019, and then hit somewhere between $675,400 and $758,600 in 2020.

In the outlook, CMHC says it anticipates housing prices will "rise slightly" after some moderation.

The agency also predicted the next two years for the rental market in the province. "Market conditions are not expected to substantially lift the average MLS price in 2020 and price growth will continue to be relatively flat".

When the region's vacancy rate started to fall from 1.5 per cent in 2014, it pushed local governments to start new construction on rental housing.

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