(Pixabay)

By David Opinko

Canada’s housing market should rebound in mid-2021: report

May 27, 2020 | 10:24 AM

LETHBRIDGE, AB – If you are looking to buy a home, consider doing so within the next 12 months if you can.

A new report from the Canada Mortgage and Housing Corporation (CMHC) says it will be about a year before home sales, and by extension, the cost of buying a home, will rebound to about normal levels.

The COVID-19 pandemic has crippled the public’s ability to purchase homes as many have been out of work and/or seen a drop in revenues at their businesses.

So far in 2020, the CMHC estimates that real estate transactions have declined by anywhere from 19 per cent to 29 per cent from their pre-COVID levels nationally. Home prices have also fallen nine per cent to 18 per cent.

“Following large declines in 2020, housing starts, sales and prices are expected to start to recover by mid-2021 as pandemic containment measures are lifted and economic conditions gradually improve,” says CMHC Chief Economist Bob Dugan. “Sales and prices are likely to remain below their pre-COVID-19 levels by the end of our forecast horizon in 2022. The precise timing and speed of the recovery is highly uncertain because the virus’s future path is not yet known.”

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While the agency admits that there is a lot of uncertainty with when and to what degree the Canadian economy will recover, they have provided forecasts for the real estate sector.

“According to our forecast range, Canada’s housing markets could start to rebound by the end of the first half of 2021, once the unprecedented medical emergency abates sufficiently to allow containment measures to be relaxed, and consumer and business confidence to recover,” reads the report.

They believe Alberta and Saskatchewan will have a more prolonged downtown due to the additional negative impacts on oil output and employment in that industry.

Forecasts for home construction in Alberta. (Supplied by CMHC)

Forecasts for home sales in Alberta. (Supplied by CMHC)

Forecasts for home prices in Alberta. (Supplied by CMHC)