Home price could rise by 14% in 2021 – CMHC

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Canada Mortgage and Housing Corporation on Thursday said the average home price could rise by as much as 14 percent this year, but the pace of sales could moderate by the end of 2023 if broad immunity to COVID-19 is soon achieved.

This is expected as economic growth and employment in Canada recover from losses incurred during the COVID-19 pandemic. Also, as broad immunity to the pandemic takes hold and restrictions are lifted, in Canada and globally, the CMHC said on Thursday.

It said that the pace of sales is expected to moderate from recent highs. Slower sales growth will help moderate the pace of price growth.

The agency predicted also that rental demand will recover as immigration recovers, but vacancy rates will likely remain elevated relative to recent years. Housing starts will stabilize at levels consistent with household formation by the end of 2023.

The precise timing and speed of the economic recovery in major markets are highly uncertain and outlooks remain subject to significant risks, it warned. These include A slower-than-expected vaccine roll-out that could prolong the pandemic and stronger than expected inflationary pressures potentially leading to higher mortgage rates, among other risks.

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