Canada Mortgage and Housing Corp. says it expects home prices and sales to decline substantially this year and still won’t have recovered by the end of 2022.
The federal housing agency says in a special housing market outlook that it expects home prices to decline between nine and 18 per cent, and as much as 25 per cent in oil-producing regions, before starting to recover by mid-2021.
It says the drop in home prices will come along with a “historic recession” this year as the economic shock of COVID-19, including a plunge in oil prices, hits the market.
CMHC says home sales could decline by 19 to 29 per cent from pre-COVID levels before starting to recover late this year.
Home building will also be affected, with housing starts expected to see declines of between 50 and 75 per cent this year compared with pre-COVID-19 levels before starting to rebound next year.
The agency emphasizes the high degree of uncertainty going forward, including the potential for a more severe and sustained recession if the pandemic is not contained.
This report by The Canadian Press was first published May 27, 2020.