OTTAWA, Ontario – The coronavirus pandemic’s profound impact on the Canadian economy has created “unprecedented uncertainty” for forecasting housing construction and sales activity, according to a special edition of the Housing Market Outlook recently released by the Canada Mortgage and Housing Corporation (CMHC).
The report focuses on Canada’s major housing markets: Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal. It notes that sales and construction dropped due to “severe short-term impacts on economic conditions in Canada’s major urban centres. What’s more, CMHC said, “Home prices will likely fall because of uncertainty over the economy’s path.”
The CMHC report cites alarming unemployment data tracked by Statistics Canada. More than 3 million Canadians lost their jobs in March and April, though “a limited rebound appears to have started in May.” Canada’s three largest census metropolitan areas experienced steep initial employment declines of 18% in Montreal, 17% in Vancouver and 15% in Toronto.
“COVID-19 has had unprecedented impacts on Canada’s urban centres,” said Aled ab Iorwerth, CMHC deputy chief economist. “Short-term uncertainty will lead to severe declines in sales activity and in new construction. As the virus is overcome, cities will bounce back but there is significant uncertainty with respect to the path and timing of the recovery.”
According to the report, housing activity in Toronto, Quebec and other major job hubs where it is easier for people to work from home in some industries may prove to be more resilient compared to Calgary and Edmonton which have strong ties to the beleaguered energy industry.
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