Correction at Hand? Canada’s Two-Year Housing Outlook

The Conference Board of Canada, 17 pages, April 12, 2022
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 remain red hot, buoyed by favourable cyclical underpinnings and pent-up demographic demand. However, looming interest rate hikes, fatigued homebuyers, and potential regulatory moves foreshadow cooling.
  • While companies’ work-from-home policies boosted residential demand in smaller centres, a rollback of these policies and high gas prices will make these markets less attractive.
  • Canada’s average resale price rose 22.5 per cent in 2021 but will begin easing in mid-2022. By 2024, this price will have dropped by 10 per cent.
  • Canadian housing starts will ease to 260,000 units in 2022 and to 231,000 starts in 2023 following a 45-year-high of 271,198 units in 2021.
  • Residential investment has become a large contributor to GDP; its recent pullback and modest prospects could produce significant economic drag.

Table of Contents

Key Findings
Housing Snapshot
Housing Markets at a Turning Point?
Forecast Underpinnings: Interest Rates, Job Markets, and Demographics
Policy Moves
New Construction
Housing Starts
Resale Markets
Residential Investment
Methodology

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