Housing prices in Canada may not recover for at least two years
It could be at least two years before Canada's real estate prices return to pre-recession levels, experts say.
The Canada Mortgage and Housing Corporation (CMHC) said yesterday during a presentation that the housing agency doesn't expect home prices to bounce back until at least 2022.
CEO Evan Siddall said that the CMHC did a stress test back in January tht looked at a pandemic scenario, but did not anticipate it would be as severe as it has been.
The CMHC is a Crown corporation that performs market analysis for housing-related industries, mortgage insurance for lenders and funding for public housing projects. When discussing its financial report yesterday, it was revealed that 10 per cent of homeowners in Canada had chosen to defer their mortgage payments.
"Tens of thousands of Canadians are having trouble meeting their mortgage commitments," Siddall said.
A #mortgage deferral does not mean you get a #mortgage amnesty. You will have to pay repay the amounts of the skipped payments. Learn more: https://t.co/c3FdPCFwPc pic.twitter.com/60FABfknml— CMHC (@CMHC_ca) May 4, 2020
Homeowners across the country have been given the option to extend mortgage deferrals by a further six months, while some provinces like Ontario have given them grace periods for bills.
But with the economic closure and job losses, the CMHC says that it will have to continuously reassess the situation in order to achieve a reliable forecast.
Factors that play in to its assessment of the market include income level deterioration due to unemployment, immigration and the status of the construction industry — all of which is up in the air right now.
The CMHC's report comes after new figures show a drop in house sales across the country, including in Canada's biggest housing market, Toronto, where prices for condos specifically are decreasing, but real estate prices in general remain up 0.1 per cent from the same time last year.
Rent prices have also fallen in Toronto, 2.7 per cent to $2,107 for a one bedroom and 4.1 per cent to $2,705 for a two bedroom.
The Canadian Real Estate Association is set to release its local and regional figures on May 15, but other studies and projections have said that prices may not be dramatically impacted by the pandemic long-term.
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