Canada Home Prices to Hit Peak Levels in 2025, Reach New Highs by 2026



The Canada Mortgage and Housing Corp. predicts home prices could match peak levels by next year and soar to new highs by 2026, as per their latest housing market outlook.

The Canada Mortgage and Housing Corp. (CMHC) has released its latest housing market outlook, predicting that home prices could reach peak levels seen in early 2022 by next year and hit new highs by 2026. Despite an increase in rental housing supply expected in 2023, the CMHC warns that demand will outpace supply, leading to higher rents and lower vacancy rates in the coming years. Affordability in the home ownership market is also a concern for the next three years, as declining mortgage rates and strong population growth are expected to drive a rebound in home sales and prices.


Canada Home Prices to Hit Peak Levels in 2025, Reach New Highs by 2026

According to the CMHC, Canada home sales dropped by around one-third from their peak in early 2021 to the end of 2023, with prices falling by nearly 15 per cent over that time. However, the agency notes that the pool of potential homebuyers has grown due to robust population growth, increased savings, and higher incomes. The resurgence in the Canadian housing market is expected to be driven by a shift in demand towards lower-priced homes and markets across Canada.

Looking ahead, the CMHC predicts that sales activity from 2025 to 2026 will slightly surpass the past 10-year average but remain below the record levels seen from 2020 to 2021 due to the high cost of housing. Housing starts in Canada are expected to decline this year before recovering in 2025 and 2026, reflecting the impact of higher interest rates on new construction.

On a regional basis, the CMHC forecasts that Ontario and B.C. will drive the decline in national housing starts this year, while the Prairie provinces are expected to perform well due to affordable home prices and a stronger economic outlook. In Quebec, housing starts are expected to grow but remain below pre-pandemic levels, while the Atlantic region will see less pressure on new home construction due to weaker population growth.

The CMHC's housing market outlook paints a picture of a rebounding housing market with rising prices and sales activity, driven by factors such as population growth, declining mortgage rates, and shifting demand towards lower-priced homes. However, affordability remains a concern, and challenges such as financing costs may impact developers' ability to boost construction in certain regions.

Canada Home Prices to Hit Peak Levels in 2025, Reach New Highs by 2026

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