Canada’s Major Housing Markets’ Speed of Recovery to Vary

Ottawa, June 23, 2020

Significant employment and income declines, coupled with uncertainty over the future trajectory of the virus and employment and income conditions, will lower demand for housing in 2020. The Housing Market Outlook — Special Edition (HMO) released today by Canada Mortgage and Housing Corporation (CMHC) forecasts housing starts, sales and prices for Canada’s major housing markets are likely to remain below their pre-COVID-19 levels over the forecast period. The precise timing and speed of the recovery in major markets is highly uncertain and will vary considerably.

Building on the release of CMHC’s HMO on May 27, 2020, which provided housing forecasts for Canada and the Provinces, this report provides projections for housing activity in Canada’s largest urban centres until the end of 2022: Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montréal. A backgrounder with full details for each market is at the end of this release.

“COVD-19 has had unprecedented impacts on Canada’s urban centres. Short-term uncertainty will lead to severe declines in sales activity and in new construction,” said Aled ab Iorwerth, CMHC’s Deputy Chief Economist. “As the virus is overcome, cities will bounce back but there is significant uncertainty with respect to the path and timing of the recovery.”

Key findings:

Necessary health measures and economic contraction will lower demand in the housing market. These effects will be exacerbated by uncertainty about the trajectory of the virus and over the economic fallout. House prices in Canada’s major centres will fall as a result, and are unlikely to recover over the horizon of this report.
Sales and construction have dropped and will continue to drop across Canada’s major markets. Resale activity and average house prices will fall across all markets but the rate and magnitude of declines of both will vary.
Average prices in Toronto, Montreal and Ottawa are expected to rebound sooner and in the 2020 – 2021 period, while average prices in Vancouver, Edmonton and Calgary are not expected to see a rebound until later in the forecast period.
Due to the uncertainties around oil prices and path of the regional economy, average home prices are expected to see declines in Calgary and Edmonton.
Lower immigration and less mobility within Canada, coupled with a surplus of buildings under construction could lead to vacancy rates increasing in the rental market. However, these increases will be in markets with historically low vacancy rates and are likely to be short-lived as demand for rental continues to grow in the medium term.

Understanding our forecast:

Our outlook covers a range of plausible scenarios. The HMO — Special Edition incorporates a wider range for housing indicators than we normally publish, reflecting the heightened risks and uncertainties of the current context. The upper bound of the forecast depicts a more optimistic scenario while the lower bound shows a more significant and protracted downturn in the economy and housing market. Our framework is based on key drivers of the housing market activity, including gross domestic product (GDP), trends in the labour market, demography, incomes and mortgage-lending conditions.

Starting in 2020, we moved the release of the HMO to the spring to align with the annual needs of our clients, data availability and our corporate reporting.

CMHC supports the housing market and financial system stability by providing support for Canadians in housing need, and by offering housing research and advice to all levels of Canadian government, consumers and the housing industry.

For more information, follow us on Twitter, YouTube, LinkedIn, Facebook and Instagram.

Information on this release:

Angelina Ritacco
CMHC Media Relations
416-218-3320
aritacco@cmhc-schl.gc.ca

Backgrounder:

Canadian Major Centres Forecast Summary
	2018	2019	2020(F)		2021(F)		2022(F)
	2018	2019	(L)	(H)	(L)	(H)	(L)	(H)
Vancouver
Total Starts	23,404	28,141	11,925	17,710	15,290	23,475	16,050	24,060
MLS® Sales	33,057	33,535	27,290	29,515	25,590	29,800	27,100	32,370
MLS® Average Price ($)	966,866	923,195	892,790	918,555	827,760	889,455	809,215	888,580
Calgary
Total Starts	10,971	11,909	4,300	6,745	7,375	10,945	9,200	12,771
MLS® Sales	20,534	20,938	15,300	18,380	15,130	19,965	17,680	22,130
MLS® Average Price ($)	460,619	443,254	390,400	432,800	341,700	411,000	335,300	399,800
Edmonton
Total Starts	10,038	10,720	4,020	6,400	6,115	9,075	7,630	10,590
MLS® Sales	18,486	18,524	13,380	16,550	10,760	16,040	11,550	16,970
MLS® Average Price ($)	374,577	364,558	316,700	353,600	276,000	336,700	270,900	325,500
Toronto
Total Starts	41,107	30,462	16,880	22,660	25,315	33,340	29,590	37,935
MLS® Sales	78,477	88,223	76,000	82,000	69,000	79,000	72,000	85,000
MLS® Average Price ($)	787,976	819,544	825,000	870,000	739,000	840,000	770,000	880,000
Ottawa
Total Starts	7,539	7,782	4,800	6,500	5,500	7,600	5,800	8,200
MLS® Sales	17,699	18,882	14,200	16,100	12,800	15,100	13,400	16,700
MLS® Average Price ($)	408,951	443,504	451,500	481,000	406,000	460,000	415,000	490,000
Montreal
Total Starts	25,000	25,112	14,000	20,200	19,000	25,750	17,500	25,000
Centris® Sales	46,695	51,329	46,500	49,600	43,500	48,500	43,500	51,500
Centris® Average Price ($)	384,713	408,401	405,000	422,800	392,000	425,000	398,000	442,000