Housing prices in Canada could drop in a couple of years
There is finally some optimism in the real estate market.
The Canada Mortgage and Housing Corporation (CMHC) has released a new report showing that average home prices in the country could rise by 14% during 2021, but then level off by 2023.
Earlier, the Federal Housing Agency of Canada predicted that the average cost of housing will reach $649,000 CAD by the end of this year and $704,900 CAD in 2023. The Mortgage and Housing Corporation has a more optimistic view. They estimate the average price will be $628,400 CAD this year and $669,500 CAD by the end of 2023.
At the end of 2020, the average cost of housing was $567,699 CAD. Low mortgage rates triggered strong demand for real estate in early 2021, and consequently a jump in prices. The market bubble affected not only metropolitan areas, but also smaller cities.
CMHC predicts that by 2023, demand for real estate will be held back by high prices and rising borrowing rates. The pandemic trend towards buying homes in the suburbs and rural areas is also likely to disappear. However, all of this is only possible if Canada beats COVID-19 and the economy returns to the levels it was at before the pandemic.
Rent is not the most affordable right now either, but prices are still reasonable in some cities. RedMapper has published rent prices in different Canadian cities.
