Canadian Home Sales Will Fall Over Next 2 Years, CMHC Forecasts

Canada Mortgage and Housing Corp. projects housing starts and sales are both expected to decline in 2019 and 2020

The "headwinds" facing Greater Victoria's housing market will lead to a deceleration in average price growth, but it will not necessarily bring overall resale prices down.

"Our key takeaway from this year's outlook is moderation in Canada's housing markets for 2019 into 2020", Bob Dugan, chief economist at the CMHC, said in a statement. The trend suggests more modest pricing is on the horizon. Buyers' market conditions are expected to slowly subside and this will help stabilize housing prices in 2019.

CMHC expects MLS resales to drop from 8,464 units in 2017 to 6,500-7,500 sales this year.

The average MLS sale price in Alberta was $398,228.

Resales will also dip through the end of 2020, added Senagama, due to rising mortgage rates.

The report said existing home sales will experience a fourth-straight yearly decline in 2018, with stabilization and some growth in 2019.

The agency also predicted the next two years for the rental market in the capital, and said it expected that vacancies will rise over the one per cent mark. "Units already under construction will expand the universe of goal built rental significantly".


The CMHC says the resale market has shifted significantly over the past year or so. As older units turn over, their rents will be increased to reflect the new price level.

However, this market is expected to remain tight across Metro Vancouver, as rents continue increasing faster than inflation, on average.

The report said the vacancy rate in Alberta expected to gradually decline over the forecast period, with the exception of oil-sands-driven economies such as Wood Buffalo and Cold Lake, where vacancy rates are expected to remain elevated.

But while renter are getting more to choose from, the average price for those suites is not coming down.

"MLS sales in Alberta are projected to be lower in 2018 compared to 2017". CMHC forecast range is: $387,100 to $390,500 this year; $390,000 to $393,700 in 2019; and $394,000 to $398,600 in 2020. They are not expected to return to the 100,000 mark seen in 2016 and 2017.

"Through nine months of 2018, the average MLS price in Alberta was approximately $390,000, down 2.6 per cent from the same period in 2017". It is then expected to range from between $681,800 and $756,200 in 2019, and then hit somewhere between $675,400 and $758,600 in 2020.

The agency also predicted the next two years for the rental market in the province. "As demand moves to lower levels relative to new supply, market conditions are expected to ease".

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