Home builders in Regina and Saskatoon are staying optimistic about home sales, despite Canada Mortgage and Housing Corporation stating otherwise.
In its 2020 Housing Market Outlook, CMHC predicted housing prices to fall between 19 and 29 per cent across the country, percentages based on projections pre-coronavirus pandemic.
The outlook forecasts Saskatchewan markets “are more heavily weighted to the downside than for other provinces.”
“The harsh forecast released by CMHC really only reflects a “best guess” of what might happen in the housing market over the next year,” said Stu Niebergall, Regina & Region Home Builders’ Association CEO.
“Their predictions come off a bit like someone running into a room screaming ‘fire!’ when things are hot, but no one has seen any smoke or flames yet.”
Niebergall noted the report took more of a “pessimistic” approach.
“The gap between the best-case and worst-case scenarios presented here reflects the extreme uncertainty caused by the pandemic,” Regina & Region Home Builders’ Association said in a press release.
“Not to mention, CMHC’s worst-case scenario also assumes that a second wave of the virus and subsequent shutdowns will occur.”
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The report also indicated that existing homes sales in Canada could decline between 19 per cent to 29 per cent.
“Ultimately, CMHC’s forecast underestimates the resilience of the housing sector during the pandemic so far. Their predictions assume that sellers would simply accept a drastic price reduction on the sale of their home,” said Chris Guérette, Saskatoon & Region Home Builders’ Association CEO.
“We believe that it will be difficult to find many sellers to accept the kind of discount on their listings that would be necessary to force average national housing prices to decrease as quickly and as drastically as CMHC predicts.”
The outlook also stated that housing starts could see a decline between 51 per cent to 75 per cent in the second of 2020 from pre-coronavirus levels.
The full report can be read here.
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