It’s difficult to predict how long it will take for Canada’s housing market to recover from COVID-19 crisis, but one thing is certain — the pain will be felt differently across the country, a new report says.
Canada Mortgage and Housing Corporation’s latest Housing Market Outlook, which focuses exclusively on urban areas, says “the precise timing and speed of the recovery in major markets is highly uncertain and will vary considerably.”
In cities where industry lends itself better to working from home, the recovery may be less difficult, the report says.
It points out that exposure to the energy sector will be felt in a longer-term fallout for Calgary and Edmonton real estate markets.
“COVID-19 has had unprecedented impacts on Canada’s urban centres,” said CMHC’s deputy chief economist Aled ab Iorwerth in a written statement released with the report. “Short-term uncertainty will lead to severe declines in sales activity and in new construction.”
“As the virus is overcome, cities will bounce back, but there is significant uncertainty with respect to the path and timing of the recovery.”
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The federal housing agency said a combination of factors related to the pandemic, such as higher unemployment and lower income, will slow housing starts and push sales and home prices below pre-COVID levels.
CMHC says the market likely won’t see a return to pre-pandemic levels before the end of 2022.
Average home prices in Toronto, Montreal and Ottawa are expected to rebound sooner than those in Vancouver, Calgary and Edmonton, starting in late 2020 and rolling into early 2021.
Job losses or reduced work hours have made buyers skittish, and those who are prepared to buy may be reluctant to shop for new homes while observing social distancing measures, the report says.
Earlier this month, CMHC said the annual pace of housing starts, excluding Quebec, fell 20.4 per cent in May compared with April.
The Canadian Real Estate Association reported in May that home sales had their worst April in 36 years.