Real estate prices will remain high at least until 2024

Home sales and the pace of price increases will remain strong in Canada in 2022, and those increases are expected to continue into 2023 and 2024, according to the Housing Market Outlook released Thursday by Canada Mortgage and Housing Corporation (CMHC).

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The CMHC report, which looks to the next three years, says that by late 2023 or early 2024, “sales and price growth in the housing market will converge to historical averages, but high price levels will persist.

“These factors will increase the pressure on home affordability,” say the report’s authors.

“Improving employment and immigration levels should play a key role as the restrictions imposed by the pandemic continue to ease. In 2023 and 2024, price growth will converge towards long-term averages, but sales and housing starts are expected to remain above the 5- and 10-year averages.

Markets that are already depressed, including Vancouver, Toronto and Montreal, should continue to drive price growth.

Housing starts in the Montreal Census Metropolitan Area (CMA) in 2021 hit a 30-year high, according to the CMHC. In 2022, they will remain at historically high levels, but will decline from last year’s record levels.

“The Montreal housing market has recently seen a significant volume of housing starts and resale market transactions. In 2022, the pace of construction and sales will decrease. The supply tightening will ensure that price increases will remain significant,” analyzed Francis Cortellino, Senior Specialist at CMHC.

For the Quebec region, market analyst Nathan R. Lea estimates that residential construction is likely to decline moderately due to a slowdown in rental housing starts.

“Furthermore, the slight slowdown in demand for real estate should lead to an easing in the resale market and a moderate deceleration in price growth over the forecast period,” he added.

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