As per a report by the CMHC (Canada Mortgage and Housing Corporation), home prices are finally forecast to stabilize
after a period of "unsustainable" price increases.
“Low mortgage rates, high savings rates and persistent, uneven impacts of the pandemic and low immigration are forecast to continue to support sales of more expensive housing types while limiting rental demand,” explained CMHC in its latest Housing Market Outlook report. “Existing home sales and price growth will moderate from unsustainable 2020 pace of increase but will remain elevated.”
Over 550,000 homes were sold in 2020, and that figure is expected to reach 602,300 in 2021. A decrease to 547,000 homes sold is expected for next year. CMCH sees the national home price average to be at around $649,000 by year's end, a 14% increase from last year's average. The agency expects prices to continue trending upward over the next couple years, forecasting an average of of $704,000 by the end of 2023.
“Economic conditions are expected to return to pre-pandemic levels by the end of 2023, if broad immunity to COVID-19 takes hold by the end of 2021,” stated CMHC’s chief economist, Bob Dugan. “This includes the pace of home sales and prices, which we expect to see moderate from 2020 highs over the same period. However, significant risks remain with respect to the path, timing and sustainability of the recovery," he added
An NDP government would mandate a 20% tax on home purchases executed by non-Canadian residents. Jagmeet Singh also pledged carry out significant investment in housing supply in hopes of curtailing price pressures seen across the majority of the country.
“Let’s massively invest in housing as a way to create jobs locally in communities and as a way to ensure people have a place to call home,” said Singh - committing to building over 500,000 new units over 4 years, accompanied by $14 billion price tag.
“We know that people are treating Canada like a stock market when it comes to housing and just plopping their money into the housing market, hoping it will continue to grow,” Singh said.