When will the Canada Housing Market recover?
Tuesday May 19th, 2020Share
The latest data shows home prices tumbled in April across Canada's largest cities. The transaction volume has improved in May so far but still is very low compared with the previous year. Due to the limited supplies amid the uncertainty of the current market, fewer buyers are rushing into buying the property.
CMHC is forecasting the housing market will not be fully recovered until 2022. Many Canadians are having trouble meeting their mortgage commitments. Currently, about 10% of CMHC's insured mortgage is in the deferral. CIBC economics say the housing market faces challenges in the next year or so once the deferral periods run out. Forced sales will add to supply and outweigh the offsetting effect of the reduced supply. RBC and moody predicts year over year price declines anywhere from 5% to 10%.
However, it is hard to predict markets reliably because of many unknown factors.
- Future employment
- Future immigration
- The response of the Construction industry
- Government intervention of the housing market