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.
Residential Markets Face a Cooling: Canada’s Two-Year Housing Outlook—August 2021
Residential Markets Face a Cooling: Canada’s Two-Year Housing Outlook—August 2021
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- Canadian resale markets seem to be slowing following months of frenetic activity. We now expect turning points to signal a moderate pullback, not a meltdown. This may negate the need for further regulatory action following relatively modest efforts to date.
- Work from home possibilities and the “race for space” have allowed big-city commuters to seek homes that are more distant. This has bolstered relatively remote resale markets but curbed demand for smaller downtown units. A looming end to the pandemic may temper this trend.
- We expect housing starts to hit a 45-year high of 262,100 units in 2021–up from 217,800 units in 2020.
- We also anticipate starts will remain close to 225,500 units in 2022.
- Canada’s national average resale price will begin easing later this year, but still post a 24 per cent annual increase. We think this price will fall by nearly 3 per cent in 2022 and by 6 per cent in 2023, resulting in a peak-to-trough drop of 10 per cent.
- Residential investment in ownership transfer costs, largely made up of realtors’ commissions, is surging. It generated a larger share of national output in this year’s first quarter than did investment in intellectual property products.
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