Union City Condos . The biggest obstacle facing the Canadian housing market. Canadian house prices are expected to rise less than consumer inflation next year, as rising unemployment and falling immigration cool the property market. House prices have risen much more than expected this year.
A survey of 14 real estate market analysts and economists on September 15-25 showed that house prices across Canada rose by an average of 6.0% this year, the highest estimate since the survey began in November 2018. Three months ago, house prices were expected to rise by only 1.5% this year.
“House prices have been quite resilient so far this year, probably reflecting the backlog of projects caused by the spring blockade, pent-up demand from high-income families less affected by the epidemic, and ultra-low interest rates.” Said Tony Stillo, head of the Canadian economic department at the Oxford Institute of Economics.
“while the new federal income support program should mitigate downside risks, several government emergency support programs will expire this fall, and we expect housing activity to fall and prices to fall between later this year and mid-2021, especially in the urban apartment market.”
Home prices are expected to rise 1.0% next year, compared with a 1.2% drop in the June survey. But in a worst-case scenario, Canadian house prices are expected to rise by just 2.0 per cent in 2020 and fall by 10.0 per cent next year.
“the housing market will face the toughest challenge in 2021, as disposable income, low mortgage rates and loan delays, which boost the housing market in 2020, will reverse and adversely affect house prices.” Said Brendan LaCerda, a senior economist at Moody’s Analytics.