Real estate prices across Canada are expected to fall more in line with economic fundamentals such as income, job and population growth.
That’s the forecast as predicted by the Canadian Mortgage and Housing Corporation (CMHC) for the nation’s housing market through 2020.
Both sales and housing starts are predicted to decline in the coming years, with demand shifting towards relatively less expensive housing options like apartment condominiums versus higher-end single-detached homes.
"Slower employment and GDP growth, as well as gradually increasing mortgage rates, will restrain the increase in demand for existing homes by 2020," said the report.
"As demand moves to lower levels relative to new supply, market conditions are expected to ease."
CMHC says it still sees global trade as a "risk" to the Canadian economy and the housing market, despite the recent trade agreement reached between Canada, the U.S. and Mexico.
A recent study conducted by Point 2 Homes concluded that Canadians on average pay 56% more to own a home, and 25% more to rent compared to a decade ago.