This housing market Outlook edition will reveal a scenario of the pandemic’s preliminary economic impacts.
It offers all insights you require when it comes to extreme uncertainty. In the forecast, you’ll see a wide array of plausible accounts of housing indicators that include:
- Prices of house
- Sales of home
- Housing statistics
In the housing markets, there was a recession last year
The provincial and national economic outlook was subjected to considerable risk as a result of the:
- The timeframe of the pandemic and coronavirus rapid Evolution
- How fast the financial markets and global economy reacted
- Apparent regional disparities when it comes to the housing market’s economic impact
It was predicted that there’ll be a historic recession in Canada last year including heavy declines in every housing indicator. Heavy loss when it comes to employment and household income and a standstill in migration, contributed to the unforeseen falls in sales and construction activity. There’s a compound housing activity decline in oil-producing provinces due to the fact there’s also a historic low in the energy sector.
As a result of the 2020 declines, housing prices, sales, and starts are believed to begin recovery in the middle of 2021 because there’s a recession in the pandemic. Prices and sales may still remain below their levels before coronavirus by the end of next year. There’s high uncertainty of the duration and precise timing of the recovery because we do not know the direction of the pandemic.
A decline in housing starts
In several provinces, there was a slow down in residential construction activity, especially in Ontario and Quebec resulting in a reduction in the start of national housing in 2020.
There was a decline in housing stats by 51 to 75 percent in the second half of last year compared to the levels before COVID-19, before it will begin receiving in the initial half of 2021 as there’s an improvement in economic conditions.
There was a decline in existing home sales
As a result of the large drop in household disposable income and employment, there was a huge drop in the demand for existing houses last year. Listings fell as a result of weaker demand that resulted in a significant decrease in sales of existing homes.
There’s a high tendency of sales declining within the range of 19 to 29 percent from their levels before the COVID-19 before it starts slowly and gradually recovering in 2021. By the end of the production horizon, there’s a high tendency of the sales not recovering to their state before COVID-19.
Housing prices will reduce then recover in 2021
Our prediction indicates that there’ll be a decline in the average MLS price by 9 to 18 percent from its level before COVID-19. In the initial half of 2021, prices will start recovering.
A decline in Provincial Housing Market Outlook
The housing indicators in Saskatchewan and Alberta are way heavily weighted down compared to other provinces. Because of the negative impacts of the price of oil lowering, more pressure is put on these provinces’ housing market.
There’s a high tendency of Manitoba to see smaller housing indicators declines compared to other Prairie Provinces because it’s the least affected by oil prices.
This outlook is greatly similar to British Columbia, Quebec, and Ontario. Nevertheless, there’s a tendency for British Columbia seeing relatively smaller housing starts decline last year and this year, while Ontario saw quite larger declines in prices and sales in 2020.
In Atlantic provinces, there’ll be relatively lesser housing indicators decline compared to the other regions, because there’ll be a modest decline in economic conditions compared to other regions. Because the prediction environment is quite uncertain, we will continuously monitor city-level housing markets clearly, then offer more guidance and analysis as soon as we get sufficient data.