The report by CMHC was published on April 27 regarding people planning to buy a home in Canada. The report consists of an overview of housing supply and cost for 2023-25. The general outlook/ overview shows that the housing supply is unable to meet the demands. In addition, they say that the prices have reasonably declined, resulting in high mortgage rates and elevated price levels, thus making homeownership less affordable. Until the end of last year (2022), the Bank of Canada increased its interest rates to the present rate of 4.5%.
Moreover, the report also offered some context on the national outlook for rental alternatives. It asserts that rental affordability will also decline in Vancouver & Toronto because of the demand outstripping the supply. It is vital to note that these two places are home to a significant number of immigrants. When examined in the regional context, the prairies & the Atlantic region appear to provide more stability to immigrants.
The Prairie Provinces
Manitoba, Alberta, and Saskatchewan are prairie provinces. Thus, there can be more housing market developments in these provinces as compared to any other provinces in Canada. The report suggests that this is because of a minor decline in housing starts in 2023.
Further, it asserts that increased interprovincial migration will positively impact the market compared to other regions. The average house price in these provinces is less than $470,000, as stated by Canadian Real Estate Association.
In addition, the report also states that Calgary will witness a decline in housing price growth in 2023. This will happen due to the reduced demand for single-detached homes. As more and more people demand these lower-priced homes, the overall market is also expected to go down.
Quebec, Ontario, & British Columbia
These are the three most populous provinces that are likely to drop significantly if someone wishes to buy a home in Canada. Toronto, Montreal, and Vancouver have the largest housing markets.
The draw on Vancouver shows that the housing starts will definitely fall because developers will face a shrinking consumer base for condominiums along with anticipated rental demand and financing expenses. The rental demand is also expected to outstrip growth in the purpose-built rental supply.
Toronto has the same outlook and emphasizes the elevated prices over the next two years. In addition, the construction backlog is one of the significant factors in the lower supply of housing. Furthermore, rental market conditions will also remain under pressure. For instance, the average rent on a one-bedroom apartment in Toronto is $2,400.
Atlantic Region
The Atlantic region, having Nova Scotia, Prince Edward Island, New Brunswick, and Labrador & Newfoundland, is seen as moderate compared to other regions when buying a home in Canada.
In addition, people can buy a home in Canada as the prices are decreasing steadily in Halifax, the region’s largest city. However, there is a low inventory of homes for sale, resulting in high costs.
Nevertheless, the report says that the city is still affordable to buyers who live outside the province.
Finally, the report also asserts that by the end of this year, large amounts of housing starts will be finished, thus easing some pressure present on the market.