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CMHC forecasts remain above the 10-year average
Published on February 19, 2025 • Read 4 minutes
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The monthly monthly seasonally adjusted annual starts for apartments across Canada rose by three percent in January. Photo by the Canadian press/Jonathan Hayward
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The apartment throughout Canada started the year strongly but lower immigration levels and the further developing US trade policy clouded the economic outlook of the country, which, according to the Canada Mortgage and Housing Corporation (CMHC), had a cascading effect on the real estate market.
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The monthly monthly, seasonally adjusted annual starts for apartments across Canada, rose by three percent in January, while the actual starts in housing construction rose by seven percent compared to the previous year and seven percent in areas of at least 10,000 inhabitants, the CMHC shared in its Houses with, market outlook.
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“While these increases show early signs of progress to start the year, the risks of foreign trade will be considerable uncertainties for the construction of the housing construction in the future,” said the deputy chief economist of the CMHC, Tania Bourassa-Ochoa.
While the CMHC predicts the “modest” economic growth in 2025, with the outlook in 2026-27 improving, it is a mixed bag for the real estate market.
“Slow population growth and economic challenges will restrict housing activity,” says the report. “On the other hand, some households will record improved purchasing power and strengthen housing activity at short notice.”
The housing begins to slow down in 2025, but it's all about the location
The CMHC forecasts that the apartment begin will slow down from this year until 2027 over the 10th year-average-due to a domino effect on the condominium market.
“With little interest in investors and more young families who are looking for family -friendly houses, developers will be more difficult to sell enough units to finance new projects,” the report says. “The increase in units of not sold will probably reduce new project launches, which leads to a decline in the new housing in the apartment in condominiums.”
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In the ontario centered in condominium, especially in the greater Toronto area, Hamilton, Kitchener, Cambridge and Waterloo have reduced the demand, which in turn starts “reduced condominiums, with fewer land details, project launches and preliminary construction in the past two years,” it says In the report.
The pricing, a low demand, the lack of pre -sale and the lack of land offers also put a strain on the construction of condominiums in British Columbia, but a stronger resale market could support planned projects. The CMHC also expects Condo to stay “quite weak” in the eastern markets, which includes Ottawa, Gatineau, Montreal, Quebec and Halifax.
Instead, the CMHC expects cheaper options such as row houses to run a “small recovery” in floor -oriented houses, including distant and half -fed houses.
“Regional, the new building in Quebec will recover from the recent low -levels. In Alberta, the new building will slow down at a high level, ”says the report.
Strong dynamics in the construction of rental apartments across the country largely drives housing and is expected to continue after a record year in 2024 due to state incentives for rental construction 2025-26.
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Federal programs increase the growth of the rental starts in the prairie, while a “historically narrow rental market” and government programs in Vancouver and Victoria stimulate new developments. The CMHC says. In the eastern markets, the CMHC expects that the rental will make up the “most new buildings”.
Trading war creates considerable economic uncertainty
In its report, the CMHC contains three scenarios and its effects on housing construction – low growth, medium growth and high growth – based on the “significant economic uncertainty”, which due to reduced immigration goals in the next three years and possible US tariffs goes out. In a worse case, the United States puts a 25 percent tariff on all Canadian imports.
“This could already have a major impact on the Canadian economy in 2025, including: investment uncertainty, a weaker Canadian dollar, lower export income, job losses, higher inflation [and] A higher risk of recession. “
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The highlight of the USA, in which the United States imposed a tariff from 25 percent of the Canadian goods, and Canada returns with retaliation tariffs for US goods, the report says that the economic effects by “stronger US government spending and- Government spending and the US state of higher US demand for imports. “
But even with several economic headings, the CMHC expects the activities of the real estate market in Canada to improve, since the mortgage interests and changes to the mortgage rules that previously upgrade from the market are rethinking their purchase in the pandemic era or are faced with mortgage extensions. First millennials are expected to continue to increase the demand for housing in large urban areas.
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“We expect a large part of the pent -up demand to be met by 2027,” the report says. “Although mortgage payments and prices will increase, improved labor markets and income growth will be achieved to achieve apartment growth than during the period from 2022 to 2024. This will support a further recovery of sales. “
• e -Mail: jswitzer@postmedia.com
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