Are you wondering what the market is going to look like this year? Next year? The Canada Mortgage and Housing Corporation (CMHC) officials have declared that real estate prices most likely will not return to pre-recession levels until late 2022.
CMHC chief economist Bob Dugan said that ‘reliable forecasts are difficult to make because there are so many unknown variables, including how much income levels deteriorate because of unemployment, the timing of future immigration and how the construction industry responds.’
Late 2022 is a best-case scenario projection. It can change depending on the course of the next few months. The Ontario government has and is still implementing measures to help both residential and commercial owners facing financial hardship. Until we can lean off the government for help we will not know for sure the damage coronavirus has done.
What does this mean for the future? While it’s possible that buyers can look forward to a potential break when it comes to price, sellers may not. Sellers are not getting the typical prices they would have pre-pandemic. One report says that by 2022, prices could drop more than 10% reaching 14% by 2023.
The rise in unemployment may lead to people falling behind and defaulting on mortgage payments, leading to prices dropping in the coming years. Even in the best-case scenario, all ten Canadian provinces will experience a decline to some extent within the next year.
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