CMHC cuts housing forecast as sales and prices set to slide
The revised outlook reflects the cumulative weight of economic uncertainty, slower population growth, elevated borrowing costs, and modest income gains — forces that CMHC said are expected to keep would-be buyers cautious well into the second half of the year.
Geopolitical pressures compound the domestic picture. The ongoing US-Iran conflict is forecast to temporarily lift inflation, while continued Canada-US trade uncertainty is dampening business investment and hiring decisions across the country, according to the mid-year update.
“Price reductions have not yet been enough to bring demand back into the market as economic uncertainty, income growth and borrowing conditions all have played a role in sidelining buyers,” said Kevin Hughes, deputy chief economist at CMHC.
“We expect conditions to improve over the medium-term, however, housing construction should remain suppressed as the industry factors in today’s elevated inventories and weaker demand.”
What’s keeping buyers away
The signal from practitioners matches CMHC’s revised assessment. According to the Ownright Operators Report, a survey of 1,015 real estate professionals conducted across Canada between March 27 and April 29, two in five brokers cited recession fear as the top deal killer.
