Canada Mortgage and Housing Corp. (CMHC) is warning that real estate prices will remain depressed for at least two years due to the current pandemic lockdown.
In a written statement, CMHC said they expect Canadian real estate prices won’t return to pre-recession levels until late 2022 at the earliest. The federal housing agency also cautioned that the impact of the COVID-19 pandemic is unpredictable and beyond its worst-case estimates prior to the outbreak and subsequent lockdown.
The federal Crown corporation — which provides market analysis for housing-related industries, mortgage insurance for lenders and funding for public housing projects — is now revising its estimates on an expedited basis based on experience during the spring and summer.
Preliminary figures indicate that about 10% of homeowners across Canada have chosen to defer their mortgage payments, although the rate seems to be higher in parts of the country that rely heavily on the oil and gas industry.
CMHC cautioned that the deferrals will mean that missed payments will be added to the total mortgage amount owing on terms determined by contractual agreements between lenders and homeowners.
The Toronto Real Estate Board said April home prices in the Greater Toronto Area fell 11.8% from March, when COVID-related shutdowns including open houses began to be put in place.
Greater Vancouver’s Real Estate Board said the number of sales in the western Canadian city hit the lowest levels in nearly 40 years in April.
Other major cities will release their local and regional sales figures ahead of a national tally to be published by the Canadian Real Estate Association on May 15.