Canada Mortgage and Housing Corporation (CMHC) recently released their 2022 Housing Market Outlook Report (HMOR). The HMOR is an annual publication that forecasts housing market variables such as starts, prices, resales, vacancy rates and rents. The report presents forecasts for key housing demand drivers such as population, employment, migration, earnings, and mortgage rates.
The CMHC is expecting that the number of home sales and the pace of price growth will remain elevated in 2022, compared to long running averages, but will moderate from their recent peak in 2021. The CMHC expects that the current trend will continue into 2024, as the housing market continue to reflect the impact of higher mortgage rates and lower housing affordability.
Regarding housing starts, the CMHC expects they will also moderate from their elevated 2021-levels but still remain above historical averages. This is a reflection, they say, of the expected support for new home construction to help offset the current and growing housing supply shortage.
The CMHC also believes that current rental market trends will also continue to persist over the forecast period. Downward pressure on rental vacancy rates and upward pressure on average rents will likely continue to affect rental affordability.
In a statement prepared to accompany the release of the HMOR, Bob Dugan, chief economist for CMHC, said, “Improving levels of employment and immigration are expected to be key factors, as the impact of pandemic restrictions continue to recede. In 2023 and 2024, the growth in prices will trend closer to long-run averages, with sales and starts activity expected to remain above five- and 10-year averages.”
Dugan added, that over the course of 2022, CMHC will be publishing a series of reports to help deepen its understanding of housing supply challenges in Canada and to ultimately inform better policies and decision making.
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Housing Market Outlook