In 2022, the level of home sales and the pace of price growth will remain elevated compared to long run averages but will moderate from their respective 2021 peaks. Over the 2023-to-2024 period, these trends will continue, reflecting the impact of higher mortgage rates and lower housing affordability on housing demand. This according to the latest Housing Market Outlook released by Canada Mortgage and Housing Corporation (CMHC).
Housing sales and price growth will fall more in line with historical averages by late 2023 or early 2024, but elevated price levels will persist since price growth will remain positive. These factors will place greater pressure on the affordability of entering homeownership.
Recent rental market trends are also expected to continue over the forecast period. Downward pressure on rental vacancy rates and upward pressure on average rents will likely continue to affect rental affordability.
Housing starts will also moderate from 2021 highs but remain above historical averages. This reflects expected support for new home construction to address current and growing housing supply gaps.
Over the course of 2022, CMHC will be publishing a series of reports to help deepen its understanding of housing supply challenges in Canada and to ultimately inform better policies and decision making.
“We expect the growth in prices, sales levels and housing starts to moderate from recent highs, but remain elevated in 2022. Improving levels of employment and immigration are expected to be key factors, as the impact of pandemic restrictions continue to recede. In 2023 and 2024, the growth in prices will trend closer to long-run averages, with sales and starts activity expected to remain above 5- and 10-year averages. Price growth will likely continue to be led by markets with low listings, including Vancouver, Toronto, and Montreal.”
- We expect the growth in prices, sales levels, and housing starts to moderate from recent highs but remain elevated in 2022. Robust GDP growth, higher employment and net migration will support demand.
- In 2023 and 2024, the growth in prices will moderate with sales and starts activity remaining above long-run averages. Home ownership affordability will decline, with the growth in prices expected to outpace income growth. Rental affordability is also set to decline from increasing rental demand and low stocks of rental housing.
- The growth in prices will likely continue to be led by markets with already low listings, including Vancouver, Toronto, and Montreal.
- Supply constraints on construction will continue to impact the major centres of Vancouver and Toronto, highlighting the central role of housing supply in determining affordability.
- The Prairie provinces, led by Alberta, will likely see relatively strong sales and starts levels and be stimulated by energy sector investments and higher energy and commodities prices. The growth in prices is predicted to remain well-below the national average reflecting greater balance between supply and demand than in other regions.
- Ontario, Quebec, and British Columbia will likely see the strongest price gains in 2022. This will largely reflect tighter supply constraints than in the rest of Canada. The growth in prices is expected to slow by the end of 2024.
- The Atlantic region will likely see continued upward pressure on housing activity and growth in prices from high inter-provincial migration. The level of home prices will remain relatively low in comparison to the overall Canadian average.
2022 Housing Market Outlook
|2022 (F)||2023 (F)||2024 (F)|
|New Home Market|
|MLS® Average Prices ($)||502,286||567,240||687,990||740,700||782,400||743,000||831,100||756,500||867,800|
Source: CREA, CMHC, Statistics Canada, Haver Analytics
Forecast Range (L) (H): The HMO’s forecast range provides a relatively precise guidance and includes an upper and lower bound established by a set of economic and demographic scenarios. The forecasts included in this report are based on information as of March 9th, 2022.
For information on this release:
We encourage journalists to contact CMHC Media Relations and arrange to speak to our experts regarding the national forecast and forecasts for housing markets in the 18 Census Metropolitan Areas (CMAs) covered in the Housing Market Outlook.
CMHC Media Relations
This Housing Market Outlook (HMO) provides forward-looking analysis of Canada’s housing markets. It helps anticipate emerging trends in new-home and resale housing markets and rental housing markets at the national and metropolitan-area levels. The HMO includes forecasts for important housing market variables such as housing starts, prices, resales, and rental housing market trends.
The aim of the HMO is to get this key information into the hands of buyers, sellers, mortgage professionals, builders, industry, stakeholders, and anyone active in the housing market so that they can make appropriate decisions best suited for their particular circumstances. As a trusted source of housing information, we have a responsibility to provide evidence-based information that industry and policy makers can rely on and trust.