Slower growth and rising mortgage rates
are going to keep putting the brakes on the
housing market and the economy as a whole 

Canada Mortgage and Housing Corporation (CMHC) think home prices will hit the rock bottom this year-but it’s important to note, they are not going to dip below the prices we saw before pandemic.  

The Highlights are: 

1. The average MLS home price will drop to about $643,325 in 2023, representing a nearly 9% decrease from the average price of $703,875 in 2022. However, despite the decrease, prices will still be nearly 14% higher than they were in 2020.
2. As the economy and immigration gain momentum, the stream of home prices will start climbing again in 2024, hitting an average of $694,196 in 2024 and $746,410 in 2025.
3. In an alternative scenario where high inflation and interest rates stick around for longer, if that happens, their average price forecasts are about 5% lower.

Regional Predictions 

• GTA: It is expected that total housing will fall in 2023 and accelerate in 2024 and 2025. Home ownership will be challenging due to increased price level. Rental prices will continue to climb. Average price will be 17% higher than they were in 2020 at $929.673. 

• Hamilton: It is expected that average MLS price will hit its low point in 2023 and gradually rise in 2024 and 2025. Housing starts will decrease in 2024. Slow pre-construction sales of condos might delay their start dates to 2025. Average prices will be nearly 27% higher than they were in 2020 at $692,419. 
• Vancouver: Prices remail on a long-run growth path as there are fewer homes available for a growing population.  Housing starts will fall due to the decreasing demand for condominiums and increased cost for construction and financing. Home prices will hit an average of $1,364,000 in 2024 and $1,434,000 in 2025. 
• Edmonton: Annual growth in the average home price to be less than 1% in 2023 due to a sales shift towards multi-unit options earlier in 2023. Growth should strengthen in 2024 and 2025. CMHC anticipates that home prices will an average of $448,000 in 2024 and $470,000 in 2025 
• Calgary: Rental market affordability will decline as vacancies continue to decrease and rent prices rise. CMHC anticipates that home prices will hit an average of $626,500 in 2024 and $686,500 in 2025. 
• Ottawa: The market will cool down and should decrease, resulting in the first annual price decrease in almost 30 years. However, the impact of rising interest should be felt as a result of reduced profitability of residential development projects. 2023 Rental demand will continue to be strong leading to a decrease in vacancies. 

Sources:
CMHC housing market outlook updated on August 1, 2023
Alex Leduc, Founder of Perch