The Canada Mortgage and Housing Corporation's spring report forecasts a big decline in home prices, but a Toronto realtor paints a different picture
Canada’s housing market won’t recover from its current downturn until 2022, according to the Canada Mortgage and Housing Corporation (CMHC). Acknowledging that the outlook is iffy due to the volatile nature of the COVID-19 pandemic, the CMHC’s spring 2020 report predicts a 9 to 18 per cent percent decline in house prices.
“Following large declines in 2020, housing starts, sales and prices are expected to start to recover by mid-2021 as pandemic containment measures are lifted and economic conditions gradually improve,” says CMHC’s chief economist Bob Dugan. “Sales and prices are likely to remain below their pre-COVID-19 levels by the end of our forecast horizon in 2022. The precise timing and speed of the recovery is highly uncertain because the virus’s future path is not yet known.”
Housing starts, which are new builds, will decline 51 to 75 per cent in 2020 from pre-COVID-19 levels and begin to recover in the second half of 2021, the report states, adding house prices will begin to bounce back in the first half of 2021.
Meanwhile, sales are expected to dip 19 to 29 per cent before beginning the recovery process in late 2020. The Alberta and Saskatchewan real estate markets will be more deeply affected than the rest of the country.
Toronto realtor Meray Mansour has seen those stats. But the Re/Max Hallmark Realty agent is sees something different on the ground in Canada’s largest city.
“Since the weather has warmed up, I have been seeing five to 35 offers on properties,” she says. Mansour directs me to a report from Toronto MLS (Multiple Listings Service) that indicates the average price for residential properties during the first half of May is $975,597 and $674,670 for condos. Those figure are up by 1.8 per cent from 2019 levels. Detached home sales averaged $1,477,794, up 2.6 per cent from 2019.
Those figures are lower than expectations pre-pandemic, says Mansour, who adds the crisis threw sand on what was expected to be a red hot market. But prices are still up.
Mansour also agrees with a report from real estate referral platform RESAAS that says there is resumed demand for in-person viewings.
“Things are starting to happen,” says Mansour. “People are just getting used to the idea that this is the new reality and we just got to live with it.
“I’m still screening people,” she continues, noting that potential buyers are still viewing video walk-throughs first. Mansour ensures prospective buyers are pre-qualified for a mortgage at the listed house price before inviting them for an in-person viewing.
“And it’s still masks, gloves social distancing and hand sanitizer. A lot of owners are leaving all the lights on so we don’t touch anything.”