Housing market expected to experience declines throughout rest of 2020
The declines that have plagued the Canadian housing market thus far in 2020 appear likely to continue at least for the remainder of the calendar year.
A report from the Canada Mortgage and Housing Corporation (CMHC) projects market declines will continue through the rest of 2020, but they should begin to improve by the middle of 2021.
Further, housing starts, sales and prices are likely to stay below their pre-pandemic levels into 2022.
"Following large declines in 2020, housing starts, sales and prices are expected to start to recover by mid-2021 as pandemic containment measures are lifted and economic conditions gradually improve," Bob Dugan, chief economist for CMHC, said in a news release.
"Sales and prices are likely to remain below their pre-COVID-19 levels by the end of our forecast horizon in 2022. The precise timing and speed of the recovery is highly uncertain because the virus's future path is not yet known,” he continued.
According to the findings, there are several factors that have had an impact on the housing market—lack of employment, loss of income, reduction in migration, and lower oil prices all play role.
Additionally, house prices are projected to drop by as much as nine to 18 per cent from what they were in the first quarter of 2020 before they begin to recover in 2021.
Moreover, due to restrictions on construction associated with the pandemic, housing starts could decrease by as much as 75 per cent from the first quarter of 2020, before finally starting to recover towards the end of 2021.