Canada’s national housing agency is forecasting things are going to get worse in the next few years. The CMHC’s latest forecast expects a booming population and lower rates driving housing demand. As a result of the surging activity, existing home prices are expected to rise over the next couple of years. Despite soaring demand and prices, along with their helicopter money to stimulate development, they actually see annual new home starts falling over this period.
Canadian Home Prices Forecast To Surge 20% Over 2 Years
The CMHC sees existing home prices ripping higher as interest rates are cut. By the end of this year, they expect the average sale price to rise to $711,429—advancing 4.9% from last year. Explosive growth is forecast for 2025 (+9.5%), seen moderating in 2026 (+4.6%). Their baseline forecast has the average existing home fetching $814,851 by 2026, or 20% higher than last year. Most of the activity is forecast to occur in smaller, more affordable cities.
Canadian Real Estate Sales Are Forecast To Rise
Cheaper mortgage credit is also seen boosting existing home sales, but they’ll remain weak. Last year CREA reported the fewest purchases since 2008, so it’s an easy beat. This year the CMHC is forecasting 482,244 existing home sales, an increase of 9% from last year.
They see it followed slower growth in 2025 (+7.9%), and 2026 (+1.1%), ending the period with 525,991 existing home sales in their baseline forecast. An improvement, but the volume is still significantly lower than 2021.
Annual New Home Starts Forecast To Fall Significantly
The CMHC helicopter cash to incentivize development isn’t forecast to help much. The agency sees just 224,485 new home starts this year, a decline of 9% from last year. A slight bump is observed in 2025 (+3.5%), but 2026 doesn’t see much growth from there. By the end of the forecast period in 2026, annual new home starts are expected to be 3% lower than last year.
Canada’s national housing agency sees all of this occurring against a backdrop of a weaker economy. Prior to 2020, a weak economy wasn’t exactly considered a fundamental driver of price and home purchasing. Low rates stimulate purchasing activity and facilitate price growth, but usually it’s after a market bottom. Labor market erosion isn’t typically a big driver of home purchasing.
Sounds like a whole lot of wishful thinking!!
Esssss good….the best country in the world …..
😂😂❤️
that’s it? only 20% pffft!
So someone explain to me. When the housing crisis is eventually over in the next 5 to 10 years, what’s going to happen to housing prices?
This is a major win for the people of Canada and their realtors!
Go Canada go!
#cantstopwontstop
Trying to create urgency in people’s minds to buy again
. I hope no one buys one
LOL
We are cutting down the temporary residents, how can home prices go up?
Only those speculators and investors shouting the price to go up. Realtor agents want it to spike.
Isn’t the CHRC part of the Canadian real estate cartel which stands to directly benefit from an increase in sales and prices. I have been noticing several of the key cartel members (including CREA) dropping similar stories in the last few weeks, as if to start “priming the pump,” i.e., to start shifting consumer psychology and expectations, plus kickstarting the FOMO mentality of the last decade. It’s a self fulfilling prophecy.
And if the general population is already unable to afford housing at its current cost, it is not likely to purchase at a higher cost. Seems to me that no buyers equals lower prices.
Hmm the editor saying the housing will be worst and 20 percent jump?
Is it for buyers or sellers?
Well if they introduce 40 years mortgages as UK with lower interest rates than is a Win Win situation for both Buyers and Sellers right.
We had already 40 years mortgages in 2007 and 2008 during the crash in USA. So now maybe that is the best solution.
Created by Bone-head Justin Trudeau and Liberal gouverment supported by Jagmeet Singh and the NDP. Remember we are all going to pay for these idiots . WE will see taxes rise to pay / and cuts to services fot their mistakes.
This is good news for those of us IN the housing market, but terrifying as we consider our children. Must they wait until they can benefit from our assets?
Only non working, non educated, living off the system vote bought immigrant love Canada, real Canadians see Canada for what it is, a country being intentionally and illegally destroyed by a corrupt govt turning it into a slum.
Housing market dropped by more than %20 since the 2021 peak so now we just gonna go back there where it left of , I think %20 rise in prises by 2026 is way off , it’s going to be more in the range of %30 to %38 rise , we all know how in every market there is highs lows consolidate and bull and bear market , therefore we went fron ceiling to basement and when that happens we’ll go back to ceiling and then some more likely to second floor , look at any stock graph it’ll show it .good luck to us all. Weak decision making and weak policies mass sudden immigration with no planning , here we go enjoy .
Were they ever right with their forecasts ?
No collateral, I assume. CMHC, it’s time to stop propping up a market to reduce losses from all the bad loans that you’ve insured.
I want what they’re smoking. I love living life through theory and calculations.
I have been holding off for so many years to buy a house. this can be a right time now because the 20% profit sounds like a good investment.
Demand for tents will go up. Ain’t bad : no taxes, no bills, no fees.
Mass exodus to the parks for the warm seasons.
How’s that for a rent strike?