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| Rising mortgage rates are also expected to affect housing demand and the resale market. (Ty Wright/Bloomberg) |
CMHC expects income and demand for housing support for employment but is expected to slow down and thus be reduced in the next 2 years. Similarly, the agency expects the country’s real estate market to moderate in the next two years as housing prices begin to slow down.
For his part, the chief economist of Canada Mortgage and Housing Corp, Bob Dugan, expressed in a statement “Our key conclusion from this year’s perspective is moderation in the housing markets of Canada for 2019 until 2020”.
In addition, he said, “Housing starts are expected to fall from the highest levels we have seen recently, and we expect resales in 2019 and 2020 to remain below recent peaks, while prices should reach levels that are more in line with economic fundamentals, such as income, employment and population growth”.
It is important to mention that home sales in Toronto in October increased by 6% compared to the previous year.
What does the CMHC agency expect?
The agency expects demand to continue shifting toward less expensive housing options, as well as apartment condos compared to high-end single-family homes.
Similarly, Canada Mortgage and Housing Corp continue to see the possibility that global trade is a “risk” for the Canadian economy and the housing market, despite the recent trade agreement reached between Canada, the United States, and Mexico.
Likewise, it is also expected that the increase in mortgage rates will affect the demand for housing and the resale market.
The CMHC agency also expressed that Canadian households are still vulnerable due to heavy debt burdens. He also said, “If interest rates or unemployment rates increase more than expected, highly indebted households could face greater restrictions on their consumption, which would cause downward pressure on the economy and housing activity”.
Source: CBC News
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