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.

• Low interest rates, a desire for more living space, and the recovery in employment have energized residential markets. But risks lurk, including further COVID-induced economic weakness, high consumer debt, and continued weakness in oil prices.
• We expect housing starts to ease 2.6 per cent to 210,700 units in 2021 and to hover there in 2022. Starts will slow only modestly thereafter as household formation remains solid.
• Canada’s national average resale price rose nearly 12 per cent in 2020, but growth will cool to 2.4 per cent in 2021. A drop of 1 per cent is our call for 2022, followed by annual price increases of around 2 per cent for 2023–25.
• Housing markets across Canada have strengthened, obscuring pre-pandemic strength in much of Eastern Canada and B.C.’s lower mainland and weakness in Alberta and Saskatchewan—patterns that we expect to resume eventually.
• Work-from-home provisions and the “race for space” have led many big-city commuters to seek more distant homes. This has bolstered resale markets outside of the big cities but curbed demand for smaller downtown units.

Key findings

Housing snapshot

Markets are robust, but outlooks vary

Forecast underpinnings: Low interest rates and healthy job gains

Ending emergency support measures will have consequences

New construction: Inventories falling, particularly for singles and apartments

Housing starts shrugged off the pandemic in 2020, but are set to cool

Existing housing markets: Currently strong, but set to moderate

Residential investment continues gains

Methodology