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Home prices and sales are expected to decline substantially this year and through 2021, says a new market outlook report from the Canada Mortgage and Housing Corporation.
The economic fallout from the COVID-19 pandemic could see home prices decline between 9 and 18% or as much as 25% in oil-producing regions by the end of 2020.
According to the CMHC, real estate transactions have already dropped between 19 and 29% from their pre-COVID levels nationally.
The ripple effect from the plummeting home sales numbers will also be felt in the home building sector.
Housing starts are expected to see declines of between 50 and 75% this year compared with pre-COVID-19 levels before starting to rebound next year.
We looked at the recent financial & economic developments in Canada, including the impacts of the #COVID19 pandemic. Check out the national highlights on the #housing market ⬇️ & learn more in the full report: https://t.co/AD4OLbe9YI pic.twitter.com/b8oeJoDG85— CMHC (@CMHC_ca) May 27, 2020
Provincially, the CMHC forecasts that Alberta and Saskatchewan will experience a more prolonged downtown due to the additional negative impacts on oil output and employment in that industry.
In BC, experts predict it's likely to see relatively smaller declines in housing starts in 2020 and 2021 than are Quebec and Ontario.
However, Ontario is likely to see larger declines in sales and prices in 2020 than are BC and Quebec.
While the agency admits that there is a lot of uncertainty with when and to what degree the Canadian economy will recover, they have provided forecasts for the real estate sector.
“According to our forecast range, Canada’s housing markets could start to rebound by the end of the first half of 2021, once the unprecedented medical emergency abates sufficiently to allow containment measures to be relaxed, and consumer and business confidence to recover,” reads the report.
To read the full special market outlook report, click here.
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