Canada Mortgage and Housing Corp. says the country’s real estate market is expected to moderate over the next two years as the growth in housing prices is expected to slow to more in line with economic fundamentals.
In its 2018 housing market outlook released today, the national housing agency projects housing starts and sales are both expected to decline in 2019 and 2020.
CMHC says it expects economic indicators like income and employment to continue to help support demand for housing starts, but these fundamentals are anticipated to slow down to a more sustainable pace.
Rising mortgage rates are also expected to affect housing demand and the resale market.
By 2020, CMHC anticipates demand will continue to shift towards relatively less expensive housing options like apartment condominiums versus higher-end single-detached homes.
“Over our forecast horizon, housing starts are projected to decline from elevated levels recorded recently. Resales should also moderate while house prices are expected to reach levels that are more in line with the fundamentals,” Bob Dugan, chief economist at the CMHC, said in a statement.