The average house price will soon stop falling and bottom out, but it will not return to pre-pandemic levels in 2023, the Canada Mortgage and Housing Corporation (CMHC) warned Thursday.
According to the federal housing agency, house prices and sales will register year-over-year declines and leave the country with an average annual price lower than in 2022.
However, the declines won’t alleviate much of the market’s overheating, and CMHC chief economist Bob Dugan predicts a bigger decline in housing starts this year than that seen between 2020 and 2022.
Dugan foresees some recovery in 2024 and 2025, but expects supply shortages in Canada’s most expensive and tight housing markets, including Vancouver and Toronto, to worsen .
He believes home ownership will be less affordable across Canada in the short term, due to higher mortgage rates and still high price levels.
Rent affordability will likely decline as demand outstrips rental supply, he adds.
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