Canada’s home prices are still likely to see a 5%-10% annual gain by year-end, according to Altus Group chief economist Peter Norman.
In an interview with The Financial Post, Norman said that despite the COVID-19 travel restrictions that have ground the entry of wealthy foreign homebuyers to a halt, housing will return to an upward trajectory in late 2020.
Norman acknowledged the fluidity of the situation, saying that the coronavirus might still mean worse times ahead for the market.
“Context is important for everything, and there is a lot in motion right now. It’s a difficult time to be forecasting,” Norman said. “Certainly, we see migration [being] really weak this year, and that has been a macro driver for housing in general.”
The pressures upon Canadian demographics and the economy are expected to persist throughout the second quarter and even well into the third quarter, with data in the April-June period likely to be “pretty dismal.”
However, Norman said that the housing sector’s fundamentals will pave the way for its speedy recovery once the crisis has passed.
“Don’t underestimate how fast things may come back,” Norman said. “We are not expecting prices to go down a lot. … It’s not a negative spiral; it’s not a housing crash.”
And even though prices will be “all over the map” for the next few quarters, “by the time we get to the end of the year and momentum is coming back, with pent-up demand from the downtime and supply coming back on stream in the resale market, I expect we’ll see a lot of activity,” Norman said.