Canada’s housing market is cooling down but it is still hotter than the long-term average and will likely stay that way for the next couple of years.

The latest Housing Market Outlook from Canada Mortgage and Housing Corporation looks ahead to 2024 and sees moderating price growth, sales and housing starts.  However, this moderation is relative to record setting numbers posted in 2021, so all three factors will remain above their long-term averages.  These elevated numbers will be supported by continuing demand that is being fueled by robust economic (GDP) growth, higher employment and net migration.

While moderation and stability in the housing market are generally accepted as good things, CMHC is also forecasting an on-going decline in affordability.

CMHC points to sustained high prices and rising interest rates as key factors in affordability.  But in a new and separate “Housing Supply Report” the agency names the main culprit: Supply.

“The biggest issue affecting housing affordability in Canada is that supply simply is not keeping pace with demand,” according to the report.

“Housing starts have struggled to keep up with population growth,” the report adds.

The Housing Supply Report is scheduled to be released biannually for 2022 and 2023.  CMHC says it hopes to be able to estimate the number of housing units needed in Canada to improve home affordability.