Financial Post ~ April 27th, 2023
Canadian home prices will continue to decline until the middle of 2023 before they bottom out and start rising again through 2025, according to the Canada Mortgage and Housing Corporation’s latest housing market outlook.
The national housing agency’s annual forecast, released April 27, predicts that while the average home price for 2023 will end up below last year’s level, a lack of supply and increasing demand will reinforce the country’s housing affordability challenges.
The CMHC forecasts a decline in housing starts due to higher construction and borrowing costs, predicting that new supply will remain below 2021 and 2022 levels before seeing some recovery in 2024 and 2025.
“With demand for housing still well outpacing new housing supply, affordability challenges will persist for owners and renters,” chief economist Bob Dugan said.
Higher mortgage rates and still-elevated price levels will make homeownership less affordable even while prices have declined, he said.
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