![]() ![]() Since then, inflation has risen more than expected and far exceeded targeted rates in several inflation-targeting economies, including Canada. Rental affordability pressures will increase with rental demand as fewer renter households can access ownership.Įconomic and interest rate landscape and outlookįorecasters - including CMHC - were expecting an orderly elimination of excess economic capacities 2 from the sharp economic downturn in the early months of the pandemic and a gradual rise in interest rates as central banks aimed to keep inflation under control. Despite this house price decline, ownership affordability will not improve as the benefit from lower prices will be offset by rising interest rates.The national house price is expected to decline by close to 15% by Q2 2023 from its historical peak in Q1 2022 as housing demand slows with rising interest rates and deteriorating economic and income conditions.The Canadian economy will enter a modest recession by the end of 2022 and start recovering in the second half of 2023.Interest rates are expected to rise further given the need to reduce inflation. This has led to significantly sharper than predicted interest rate hikes in Canada and other economies.Inflationary pressures have been stronger and more persistent than expected since we published our Housing Market Outlook in April 2022.Patrick is also part of a diverse national team of researchers and analysts investigating barriers to housing supply and potential solutions. Other funding and financing opportunitiesĪs Deputy Chief Economist, Patrick Perrier is part of a team of housing economists and researchers striving to improve Canada’s understanding of drivers and barriers in housing markets and how they impact affordability. ![]()
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