Canada’s housing markets should see a moderation in both housing starts and sales while house prices are expected to reach levels that are more in line with economic fundamentals such as income, job and population growth. This forecast for 2019 and 2020 is drawn from the 2018 Housing Market Outlook released today by Canada Mortgage and Housing Corporation (CMHC).
Nationally, CMHC’s outlook for 2019 projects total housing starts to edge down and range between 193,700 to 204,500 with the downward trend expected for both single and multi-unit starts. MLS sales are expected to be between 478,400 and 497,400 units annually while MLS prices should lie between $501,400 and $521,600.
Housing starts activity and MLS Sales in British Columbia should moderate as economic and population growth slows while MLS Average Prices are expected to see a flatter growth profile through 2020.
Buyers’ market conditions in both Alberta and Saskatchewan should gradually shift to a balanced market with gradual improvement in economic and demographic fundamentals. Balanced market conditions in Manitoba are expected to continue.
Ontario’s housing market saw dampened activity in 2018. Existing home sales and starts will post a partial recovery in 2019. Buyers are expected to re-enter the market on the strength of stronger than expected job growth and in-migration before the downward trend in starts and sales resumes in 2020.
Housing starts and sales of existing homes will both be sustained, however, slower economic growth and rising borrowing costs will moderate activity through 2020. Starts will continue to be dominated by the apartment market segment, while demand for resale single-detached homes will remain relatively strong.
The Atlantic region will see sustained activity, notably in Nova Scotia, where existing home sales and average prices should trend higher while rental demand will drive growth in apartment construction.
Selected CMA-level Highlights:
Over the next two years, Metro Vancouver’s resale market will see lower sales, higher inventories of homes for sale and lower home prices compared with recent market highs. Through 2018, demand and home prices softened across all market segments and local geographies.
Various factors will push and pull the demand for housing in Calgary in 2019 and 2020. Calgary’s economy will experience stronger growth in population and employment. This will help support demand and lift sales in 2019 and 2020. However, the average MLS price will continue to face downward pressure but is expected to stabilise in 2019 and modestly rise in 2020.
With balanced conditions prevailing in the GTA, we expect moderate sales growth and home prices growing in line with inflation over the forecast horizon. The rising costs of home ownership will result in strong rental demand while new supply will add some upward pressure on vacancy rates. Toronto buyers should see more housing choices as builders concentrate their efforts on new high-rise projects.
In 2018 and 2019, rental housing demand will increase slightly faster than supply in Montreal, which will put some downward pressure on the vacancy rate. Demand will be supported by rising net migration over the forecast horizon.
Provided by: CMHC