Housing Markets Moderating: Canada’s Two-Year Housing Outlook

The Conference Board of Canada, October 21, 2021
Issue Briefing
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This quarterly economic forecast presents the medium-term outlook for the Canadian economy. This release focuses on housing. For an overview of all major components of the economy, go to the Canadian Outlook main page.

Document Highlights

  • Canadian housing markets are throttling back following months of frenetic activity. Still, key underpinnings, such as mortgage interest rates, employment growth, and household formation, remain generally supportive.
  • The pandemic led to a massive increase in the number of people working from home and boosted demand for homes outside big cities. This could continue, further increasing residential demand in smaller centres.
  • Canada’s average resale price has peaked for now but will end 2021 up a record 24.2 per cent. We expect modest dips through 2023 and a peak-to-trough price drop of 10 per cent.
  • Canadian housing starts will hit a record-high 275,100 units in 2021, then ease to a still strong 236,500 units in 2022.
  • Residential investment has become a large component of GDP; its recent pullback and slow-growth prospects could be a significant economic drag.

Table of Contents

Key Findings
Housing Snapshot
Markets Come Off the Boil
Forecast Underpinnings: Interest Rates and the Job Markets
Policy Moves
New Construction
Housing Starts
Resale Markets
Residential Investment
Methodology

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