The two-year slowdown Canada experienced in the housing market is now officially over. That declaration from the Canada Mortgage and Housing Corporation (CMHC) who released a comprehensive report on the national outlook.
While potential buyers already took inspiration from the news of ongoing low interest rates for the 2020 year, the market continues to rally through 2019 with strong monthly housing starts which show no sign of decreasing in 2020. Since the federal election, Canadians have yet to witness the fall-out of a Liberal win.
Here are three anticipated trends according to the CMHC:
1. Canadian Sales will crest between 2020 and 2021
Real estate brokers across Canada remember the crash of 2018. With the market showing signs of recovery in 2019, the pendulum is swinging towards the plus sign. Sales surges in B.C. and Ontario are predicted to happen through to 2021. In part this can be accounted for by disposable income increases that are expected to occur within the two provinces.
With key markets in Canada accelerating, its place in the global home price marketplace is sure to rise.
2. Rising House Prices
The Canadian housing market has finally come out of its slumber since the imposed stress-test halted market progress. Just as sales took a hit, so home price growth was slow rising. However, it is expected to improve most dramatically in Ontario and Quebec. By 2021, the B.C. Market will push Quebec into third place for price growth. Aside from the high-performing provinces of Quebec, Ontario, and B.C., the other provinces are expected to make “modest gains” but no decreases.
3. New Builds Will Plateau
While Canadian home building hit a 10-year high in 2017, it’s been on the decline since. The CMHC says the total number of homes that started construction in 2019 is about the same ballpark total we should expect for both 2020 and 2021, in line with the historical average for annual home construction. While a strong economic outlook coupled with a strong labour market makes construction on new projects a likely possibility, CMHC warns that household formation will slow during this period.
With recovery mode in full force, it appears Canada’s markets will remain on the upswing for the next couple of years at least.