Canada Mortgage and Housing Corporation says economic conditions could return to pre-pandemic levels and moderate the pace of home sales by the end of 2023 if broad immunity to COVID-19 is achieved this year.
The federal housing agency predicts sales will be slowed by increasing mortgage rates and high prices seen in existing-home markets.
It says that slower sales growth will help moderate the pace of price growth and expects housing starts to stabilize by the end of 2023.
The agency also predicts that rental demand will rebound as immigration recovers, but vacancy rates will likely remain elevated.
The agency warns that these predictions remain subject to significant risk because the economic recovery in major markets is highly uncertain and a slower-than-expected vaccine rollout would prolong the pandemic and lead to higher mortgage rates.
CMHC’s 2021 predictions come as real estate markets like Toronto and Montreal are seeing the pace of sales slow when compared with earlier this year, but prices remain high in both markets.
The Canadian Press