OTTAWA, ON, Oct. 13, 2022 /CNW/ -The world and Canada's economic and interest rate landscape has changed significantly since the publication of Canada Mortgage and Housing Corporation's (CMHC) Housing Market Outlook (April 2022) and subsequently, The road ahead for the economy and housing (July 2022).
Throughout 2022, inflation has risen more than expected and far exceeded targeted rates in several inflation-targeting economies, including Canada. The war in Ukraine and the resurgence of Covid-19 infections in China contributed to raise energy and food prices and prolong global supply-chain disruptions that were initially caused by the pandemic. This strong and persistent inflation landscape led to a sharper than predicted rise in monetary policy and other interest rates so far in 2022.
With these factors in play, CMHC Deputy Chief Economist, Patrick Perrier has authored the article, The Road Ahead for the Economy and Housing – Fall 2022 Update. The article provides updated outlooks by CMHC for the Canadian economy, interest rates, the housing market, and new housing construction.
You can read the full article on the CMHC Housing Observer page.
- Inflationary pressures have been stronger and more persistent than expected since we published our Housing Market Outlook in April 2022.
- This has led to significantly sharper than predicted interest rate hikes in Canada and other economies. Interest rates are expected to rise further given the need to reduce inflation.
- The Canadian economy will enter a modest recession by the end of 2022 and start recovering in the second half of 2023.
- 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.
- Despite this house price decline, ownership affordability will not improve as the benefit from lower prices will be offset by rising interest rates. Rental affordability pressures will increase with rental demand, as less renter households are able to access ownership.
We encourage journalists to contact CMHC Media Relations and arrange to speak to the report author for, The Road Ahead for the Economy and Housing – Fall 2022 Update.
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As a trusted source of housing information, CMHC provides unbiased housing-related data, research and market information to help close knowledge gaps, and deepen understanding of complex housing issues to inform future policy decisions. This is another in a series of articles and reports we will be publishing in the future to deepen our understanding and close our knowledge gaps on Canada's housing affordability issues.
SOURCE Canada Mortgage and Housing Corporation
Media Relations, CMHC, [email protected]
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