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Canadian homes prices could drop up to 25% in some regions: CMHC

Should you buy a house during the coronavirus crisis?
Since the COVID-19 outbreak started at the beginning of 2020, some Canadians may have found opportunities in the housing market to buy a new home.

Canada’s housing agency says it expects home prices and sales will decline substantially this year and still won’t have recovered by the end of 2022.

Canada Mortgage and Housing Corp. says in a special housing market outlook that it expects home prices to decline between nine and 18 per cent, and as much as 25 per cent in oil-producing regions, before starting to recover by mid-2021.

READ MORE: Coronavirus and the housing market — Is this a good time to buy?

It says the drop in home prices will come along with a “historic recession” this year as the economic shock of COVID-19, including a plunge in oil prices, hits the market.

CMHC says home sales could decline by 19 to 29 per cent from pre-COVID levels before starting to recover late this year.

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READ MORE: Canadian home sales record 57% monthly drop in April

Home building will also be affected, with housing starts expected to see declines of between 50 and 75 per cent this year compared with pre-COVID-19 levels before starting to rebound next year.

The agency emphasizes the high degree of uncertainty going forward, including the potential for a more severe and sustained recession if the pandemic is not contained.