Canada Housing Outlook for 2022

Canada’s home price growth, sales levels, and housing starts are expected to moderate but remain elevated, according to the Housing Market Outlook report published by CHMC. Canada’s high employment and positive migration are expected to contribute to a strong economic environment, which will continue to support the demand for housing.

While housing demand is expected to remain strong for 2022, homeownership affordability is expected to continue to decline as prices continue to exceed the growth in income levels.

Vancouver, Toronto, and Montreal will continue to lead Canada’s housing price growth, which continues to see strong demand for larger, more expensive single-family homes.

Vancouver Housing Outlook for 2022

Home prices in Vancouver are expected to grow, but the growth rate is expected to slow to below 5% year-over-year after 2022. High home prices are being helped by current homeowners choosing not to sell their homes despite the high prices, which is reducing the number of homes listed for sale. Secondly, the total housing starts are expected to fall in 2022. Limited availability of skilled workers and supply chain issues continue to pressure housing starts.

Vancouver is expected to continue to perform well economically, with immigration expected to see growth, which holds well for the demand side for housing. Vancouver will continue to see high job vacancies as it struggles to attract workers to move to an expensive housing market.

Housing makeup is expected to continue to see a move towards densification. Single-detached homes are expected to continue to decline, with row and semi-detached houses increasing in demand.

Higher mortgage rates are expected to slow housing activity as prospective homeowners see a decrease in their purchasing power with higher rates.

Calgary Housing Outlook 2022

The average home price growth for Calgary in 2021 reached 9%, which was unusually high compared to past years. The increase was attributed to changes in home preference for single-detached homes that outpaced townhomes and condos. Calgary is expected to see continued growth in 2022 but at a slower pace, with the average home price growth slowing into 2023 and 2024.

Calgary’s economy continues to do well, with high energy prices expected to remain in 2022. Most sectors have reached full-time employment; however, the energy sector recovery has not been the same as in past recovery periods.

Higher mortgage rates are expected to slow down housing activity and put more pressure on prices. This is expected to shift buyers back into townhouses and condos.

Toronto Housing Outlook 2022

Home sales activity is expected to slow into 2022 and 2023 for Toronto. The anticipated higher mortgage rates will further erode affordability for prospective buyers. Housing is expected to slow as the city continues to deal with supply constraints such as unserviceable land and regulatory delays. The current construction backlog was at 62,000 units approximately at the end of 2021.

Buyers during the pandemic opted to move outside the GTA. It’s expected this trend will continue with the increase in remote work.

Saskatoon Housing Outlook 2022

Homes prices are expected to be lower for 2022 and 2023 but remain above longer-term trends for Saskatoon. Fewer buyers and higher anticipated mortgage prices are expected to put pressure on home prices, with home sales not expected to recover until 2024.

Higher energy, fertilizer, minerals, and other agricultural products continue to benefit Saskatoon’s economy. Most sectors within the economy have fully recovered from the pandemic. Its population growth continues to increase at an average of 2.2% despite a net outflow of inter-provincial migrants. Population growth is expected to help demand for housing, with the Government of Canada’s immigration target expected to see a high influx of international migrants into the province.

Housing starts are expected to be lower for 2022, with an anticipated increase in 2024. Housing affordability needs are expected to support greater multi-family projects for 2023 and 2024.

You can read the entire CMHC Housing Outlook Report as it includes more Canadian city projections, which I have not highlighted in this blog post.