CMHC sees home prices falling 15% from peak as economic outlook darkens
Canada will tip into a mild recession later this year and home prices will decline by 15 per cent off peak levels by mid-2023, according to a gloomier new forecast released Thursday by the country’s national housing agency.
Patrick Perrier, chief economist at the Canada Mortgage and Housing Corporation and author of the agency’s Fall 2022 Update, said national average home prices are now expected to fall to $655,190 by the end of the second quarter of 2023, down from a high of $770,812 in the first quarter of 2022.
“Some might think that house prices going down means affordability will improve, but this is not what we see,” Perrier said in an interview, noting that lower prices will be more than offset by higher interest rates combined with increasing demand from a growing population.
A recession that he now sees beginning before the end of 2022 won’t help matters.
Perrier added that the downturn will not be as grievous as the last recession and a recovery will begin in the second half of 2023.
Recommended from Editorial
Home prices to turn negative for 2022: Royal LePage
Surging rents have Canadian condo owners rethinking their plans to sell, report finds
Canadian snowbirds in Florida face cost-of-living crunch as real estate, rental prices rise