Increases in Canadian Home Prices will be Limited by High Unemployment and Lower Immigration

A recent Reuters poll indicates that Canadian home prices will increase at a much slower pace this year, than predicted just three short months ago. And they are expected to decline in 2021. The result of the COVID-19 pandemic pushing up unemployment, curtailing immigration and the demand for homes. Despite aggressive interest rate cuts from the Bank of Canada and emergency government spending, including help to furlough workers during lock down, the economy is in its deepest recession on record. High unemployment will be the biggest hurdle for the housing markets over the coming year for most respondents, followed by low immigration, household debt levels, the lack of affordable housing and recently imposed more stringent mortgage conditions.