Higher mortgage interest rates are stifling homebuyer interest, prompting a dramatic reversal in Canadian housing markets.
National resale price growth will slow to 2.0 per cent this year after a record 22.6 per cent increase in 2021. Canada’s average price will decline roughly 8 per cent and 1 per cent respectively in 2023 and 2024 before rising by 3.0 per cent in 2025.
Should the pace of current sales declines accelerate, a larger price correction could result.
Housing starts will fall to 247,100 units in 2022, down from last year’s 45-year high of near 271,200 units. Starts will hover near 230,000 units annually in 2023 to 2025.
Slowing activity in the new and resale housing markets will outweigh modest renovation growth to cut total residential investment in 2023 before it rises again slightly in 2024 and 2025.
Strong population growth will challenge industry and governments to deliver sufficient housing.
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