Overview of the Summer 2020 Housing Market Outlook Report

Our 2020 summer edition of the Housing Market Outlook report provides forecasts for Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal. It builds on the Spring 2020 edition that focused on housing market activity for Canada and the provinces.

These reports give high and low range projections on new construction, home sales, house prices and rental market activity.

Housing forecast overview for Canada’s major urban centres

• Sales and construction have dropped
• House prices will likely fall because of uncertainty over the economy’s path
• It is possible that vacancy rates increase in the rental market
• Recovery in major markets is highly uncertain and will vary considerably

For Canada’s 3 largest cities, there had been steep employment declines according to Statistics Canada:

• 18% in Montreal
• 17% in Vancouver
• 15% in Toronto

Such large employment and income declines, coupled with uncertainty over the future trajectory of the virus, will lower demand for housing in the urban centres.

Rental demand in Vancouver is more directly impacted than ownership

Key highlights:

• New construction in Vancouver will contract significantly in the immediate future.
• Resale market sales will contract and remain low for the balance of 2020 and begin to recover in 2021.
• A price decline will occur gradually over the next two years before showing some recovery late in 2022.
• The immediate decline in migration to Vancouver is expected to reduce rental demand directly.

New construction in Calgary set to decline sharply in 2020

Key highlights:

• Demand reductions for oil and gas will lower demand for housing and hence impact new construction.
• Average home price will continue to decline before stabilizing by the end of 2022.
• A reduction of immigration and migration will significantly reduce rental demand.

Demand for new homes in Edmonton declines in 2020

• Elevated inventory of completed and unsold homes in Edmonton accounts for more than half of all available homes in Alberta.
• Average home prices have been trending downwards since 2017 and will continue until 2022.
• Projected increase in rental supply with low demand is likely to lead to increases in vacancy rates in Edmonton in 2020 and 2021. 

Toronto resale sales and home prices to rebound in 2022

• Strong pre-construction sales across Toronto will ensure recovery will be slightly stronger than the rest of Ontario in 2021 and 2022.
• Home sales will start to recover by Q1 2021 and show growth throughout 2022.
• Anticipated increases in the supply of condominium apartments will lead to softening prices next year.
• An uncertain job market will likely affect millennials and may result in a staying at home with parent longer.

Ottawa’s rental market conditions will likely see little change

• Housing starts are expected to trend lower over the remainder of 2020 partly due to scarce labour and equipment.
• During 2020, demand for rental accommodation could be tempered by universities offering online courses.
• The uncertain outlook for job recovery and immigration will dampen demand for resale homes into the latter half of 2021.

Montreal’s sharp drop in housing starts in mid-2020 should be followed by a rebound

• Housing starts should rebound by year-end, as projects, settled before the pandemic, should be starting soon.
• Rental apartment starts will benefit from the slowdown in the demand for homeownership.
• By 2022, housing prices should be following a slight upward trend and even exceed their pre-pandemic levels.

Related Links

• 2020 Housing Market Outlook — Special Edition (May 27, 2020)
• Subscribe to the Housing Research E-newsletter
• News release: Canada’s Major Housing Markets’ Speed of Recovery to Vary