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.
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