As the COVID-19 pandemic continues to wreak havoc on global markets, Canada Mortgage and Housing Corporation (CMHC) said that the housing sector will see pre-recession prices only after three years, at the earliest.
CMHC Chief Economist Bob Dugan said that any long-term predictions will be inherently unreliable as the coronavirus is turning previously known quantities like income and immigration levels into “unknown variables.”
“But for Canada and for Ontario, I think, the best case we’re looking at … house prices getting back to their pre-recession levels, at the earliest, by the end of 2022,” Dugan said.
CMHC will thus be revising its earlier, far more optimistic estimates, according to chief executive Evan Siddall.
“We did, back in January, look at a pandemic scenario that was not as severe as this,” Siddall said. “And I’m sure that you’d understand that the realm of plausibility has expanded significantly as a result of all the experience we’ve had. … Tens of thousands of Canadians are having trouble meeting their mortgage commitments.”
However, the Crown corporation said that it has solid enough foundations in the interim to continue supporting affordability nationwide.
“In 2019 we have demonstrated commitment to the sound management of resources. This enables us to pay dividends to the government while helping to create new and affordable housing for Canadians as well as promote market functioning through our mortgage insurance and mortgage funding activities,” said Lisa Williams, chief financial officer with CMHC.
Siddall said that CMHC will be focusing on financial stability and risk management as the situation continues to shift.
“ has put us on solid ground so that today, amid the evolving COVID-19 crisis, we are not losing sight of our ultimate goal: that by 2030 everyone in Canada has a home they can afford and that meets their needs,” Siddall said.