Bill Kelly's April 28, 2023 Commentary
Canada Mortgage and Housing data paints a bleak picture of the housing market for the foreseeable future.
The latest data from Canada Mortgage and Housing paints a less than rosy picture of the housing market for the foreseeable future.
Despite the promises of governments that they will build millions of new homes to accommodate Canadians new and old who want to purchase a house, CMHC predicts that those political promises are unreachable .
First of all, housing builds will actually decline due to the high cost of construction and the higher interest rates that the Bank of Canada has imposed.
That means that there won’t be enough new homes to meet the increased demand, and, of course, when demand increases and supply is insufficient, prices will increase.
That’s not the kind of double whammy that home buyers need to hear.
What makes the housing picture even more bleak is that those higher construction costs and interest rates will likely stymie construction of much needed rental properties as well, which means that the already sky high rental rates on existing properties may get worse before it gets better.
CMHC does say that there may be a light at the end of the tunnel; as inflation rates fall to the 2% range, interest rates will decrease and the housing market will rebound, but, that probably won’t happen for at least another year.
It’s not the news we wanted to hear, but it’s the news we needed to hear.
Governments always tend to over promise and under deliver and on the issue of housing affordability, it looks like they’ve done it again!