CMHC to forecast steeper housing price decline of 10-15%
The Canada Mortgage and Housing Corp. will soon release revised expectations for home price declines, which will be greater than the housing authority expected last summer, chief executive Romy Bowers said at a conference Thursday.
In July, a CMHC report said a surge in interest rates could drag national home values down by five per cent by the middle of 2023. While a formal revision won’t be released until October, Bowers said it is expected to be in the range of 10 to 15 per cent.
She said falling housing prices should make homes — which rose at unsustainable levels in the first year or so of the COVID-19 pandemic — more affordable. However, higher interest rates will offset the renewed affordability, she added during a discussion Thursday afternoon at the Bloomberg Canadian Finance Conference.
Bowers said “correcting the supply-demand imbalance” by building more homes including rental properties at all price points is the best way to remedy Canada housing affordability issues.