The Canada Mortgage and Housing Corporation’s (CMHC) 2018 Housing Market Outlook showed that housing markets in the country are expected to see a moderation in both housing starts and sales, while house prices are likely to hit levels that are more in line with economic fundamentals – including income, job and population growth – over the next two years.
More specifically, the outlook for 2019 projects total housing starts across the nation to dip to a range between 193,700 to 204,500. Consequently, single and multi-unit starts alike are anticipated to decrease.
Multiple Listing Service (MLS) sales, on the other hand, are forecasted to be between 478,400 and 497,400 units annually while MLS prices should lie between $501,400 and $521,600.
Examining the outlook for specific cities, the report revealed that Metro Vancouver’s resale market will see lower sales, higher inventories of homes for sale and lower home prices compared to recent market highs.
Calgary is set to experience slowdown in the demand for housing, but will have stronger growth in population and employment. These two factors are seen to contribute to the demand and lift sales in 2019 and 2020. The downside, though, is that the average MLS price will remain low but is expected to stabilize in 2019 and slightly hike in 2020.
Toronto, meanwhile, can expect moderate sales growth and home prices growing as effects of inflation. The rising costs of home ownership will lead to strong rental demand while new supply will further put an upward pressure on vacancy rates.
Finally, Montreal’s rental housing is set to boom over the next two years. Rental housing demand will increase slightly faster than supply. This will cause downward pressure on the vacancy rate. It is important to note that increasing net migration will support the demand in the city.
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