Canada Mortgage and Housing Corporation President and CEO Evan Siddall is looking to clarify some of the agency's recent pessimism towards home prices.
In a thread shared on Twitter, Siddall explained that unexpected occurrences helped the housing market fend off catastrophe - a potential 18 percent decrease from pre-coronavirus home price averages.
"Our publication noted reservations and caveats, and described the -18% case as a highly unlikely worst case, which critics focused on. No one foresaw the extent of the discriminatory impact the virus would have on lower paid workers/renters."
“Our recent work highlights compositional/mix changes, shifting preferences, heightened savings rates, decline in immigration and reverse urbanization as unforeseen developments that help explain our forecast errors,” he wrote in one of the tweets.
Canadian home prices have smashed all projections during the pandemic. while the non-seasonally adjusted home price average jumped to a record $621,525. The average Canadian home has increased by over 25 per cent since May 2020.
The work-from-home trends permitted Canadians to flee large cities such as Toronto, Vancouver and Montreal along with their respective elevated costs of living.
Even with home prices flexing with all their might - in the face of the pandemic, Siddall believes the resumption of regular work conditions would likely threaten continuous home price growth.
“Today, we remain very concerned about an even partial reversal of these factors, economic adjustments, increased debt, the diversion of economically valuable investment [dollars] into housing, increasing inequality and increased GHG emissions post-pandemic with cities less populated,” he explained.
Though the worst case scenario, ultimately, did not become reality, Siddall explained the CHMC's objective was to illustrate potential risks to the housing market and homeowners amid an unforeseen pandemic.
“We never pretended to have a crystal ball. Nor are we all-knowing on housing,” he said. “We meant to contribute to a discourse, even though it was hard to be precise about future. In hindsight, we could have made that clearer.”