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Canada’s housing starts to stabilize, home sales to strengthen: CMHC


November 5, 2019
By Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation’s (CMHC) national housing outlook calls for housing starts to stabilize over the next two years following two years of declines. The 2020 Housing Market Outlook released by CMHC also forecasts income and population growth will support a rebound in home sales and prices.

“Housing starts are projected to stabilize in 2020 and 2021 at levels in line with long-run averages,” said Bob Dugan, CMHC’s Chief Economist. This follows two years of declines from elevated levels in 2017. Resale activity and house prices are expected to fully recover from recent declines.”

The CMHC outlook forecasts Canadian housing market activity for the years of 2020 and 2021.

Highlights:

  • Housing starts are expected to register a second consecutive annual decline in 2019 before stabilizing in 2020 and 2021. Starts for single-detached and multi-unit housing types will remain below the peaks observed in 2017 (for single-detached starts) and 2018 (for multi-unit starts).
  • Existing home sales are forecasted to stay near their 2018 levels until the end of 2019. Home sales will increase in 2020 and 2021 offsetting the declines observed since 2016, reflecting household disposable income growth.
  • The average MLS price is expected to decline for a second consecutive year from the recent high registered in 2017. Positive price growth is expected to resume in 2020 and 2021, driving the average price above its 2017 level by the end of the forecast horizon. Household disposable income growth and rates of household formation will support price growth.
  • In terms of risks to our outlook, we continue to see vulnerabilities related to international trade tensions and high household indebtedness which present risks to economic activity and housing market stability.

The HMO includes a report for Canada and 19 major centres. These reports can be downloaded here.