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 appear to be reheating, buoyed by favourable cyclical underpinnings and pent-up demographic demand, but this frenzy will not survive looming interest rate hikes.
Other potential drags on the market include a forthcoming 1.0 per cent federal tax on vacant foreign-owned homes and potential regulatory limits on housing investors.
Companies’ work-from-home policies boosted residential demand in smaller centres, but this looks set to moderate.
Canada’s average resale price rose an estimated 21.4 per cent in 2021 but will begin easing in mid-2022. By 2024, we foresee a 10 per cent decline in the country’s average resale price.
Canadian housing starts will ease to 235,000 units in 2022 and 221,760 starts in 2023 after hitting a 45-year high of 274,000 units in 2021.
Residential investment has become a large contributor to GDP; its recent pullback and its prospects for slow growth could produce significant economic drag.
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