According to the Moody’s Analytics and RPS Real Property Solutions housing outlook report released today, the Canadian housing market is poised for a rougher landing in the next few years, though it will begin to recover in late 2024.
With the rapid increase in mortgage interest rates since the start of 2022 and more to come in the near term, the underlying dynamics of the housing market are changing, putting homeownership outside the reach of millions of would-be first-time homebuyers.
The combination of increased borrowing costs, elevated inflation, and a softening labour market spells the end for the housing boom. We project house prices will suffer a peak-to-trough decline over 10% by early 2024.