Adapted from Wood Business Canada: “Lower housing starts forecast in 2024”

Canadian Housing Forecast Landscape

Canada’s housing landscape is poised for a shift in 2024, with housing starts projected to decrease, marking a notable departure from recent years’ historically high levels. This anticipation stems from the latest insights shared in the Housing Market Outlook (HMO) by the Canada Mortgage and Housing Corporation (CMHC). Spearheading this forecast is Bob Dugan, CMHC’s chief economist.

The HMO offers comprehensive perspectives and predictions spanning new home construction, rental markets, home sales, and home prices. Beyond a national outlook, this edition of the HMO furnishes data and prognostications for key urban centers including Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montréal. An additional release, encompassing 12 more Census Metropolitan Areas (CMAs) in Canada, is scheduled for May 1st.

Despite a surge in rental housing availability witnessed in 2023, the forecast points to a mismatch between supply and demand. This discrepancy is poised to translate into escalated rents and diminished vacancy rates throughout the projected timeline. CMHC anticipates a retreat from the record-setting pace of rental apartment construction seen in recent years. Contributing to sustained rental demand is the financial strain deterring renter households from transitioning to homeownership. Furthermore, robust population growth adds to the strain on rental markets.

In the realm of homeownership, both home prices and sales are on an upward trajectory for 2024. By 2025, prices may soar to levels akin to the peak recorded in early 2022, eventually surpassing them by 2026, fueled by robust demand. While home sales are projected to rebound in 2024, they are expected to linger below the record-setting levels observed in 2020-21, largely constrained by affordability hurdles faced by potential buyers.

For a comprehensive understanding of the Housing Market Outlook (HMO), visit the CMHC website.