Steady sales, rising prices seen for 2020

December 30, 2019

The Canadian housing market will gain strength in 2020 and homebuyers will continue to see rising prices right into 2021, according to Canada Mortgage and Housing Corp. (CMHC).
After a slowdown through the first half of 2019, CMHC expects housing sales to surge this year in both Greater Toronto and Metro Vancouver—feeding off the momentum seen in the last few months of 2019.
CMHC attributes this anticipated strength to disposable income increases for the two provinces that exceed the national average, higher immigration and rising demand for multi-family housing.
This demand will lead to increases in home prices, according to CMHC’s annual outlook. In fact, the house price index from Teranet and National Bank showed the November index was up 0.2 per cent from October, with the strongest gains in Metro Vancouver, Quebec City and Montreal.
CMHC believes it will be the strength of demand in Ontario and Quebec that leads to elevated prices through 2020. B.C. price growth is forecast to be leading the nation by 2021.
CMHC is predicting only modest gains in home prices for the rest of Canada for 2020.
Canadian home building hit a 10-year high in 2017 but has since slowed down sharply. CMHC believes the total number of homes that started construction in 2019 is about the same expected for both 2020 and 2021—in line with the historical average for annual home construction. This translates into starts within range of 194,000 to 204,000 units. The economic outlook for Canada is positive over the next couple of years, which should inspire confidence in the home building community.