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A recent (CMHC) says that homeownership will be more attainable in the prairie provinces over the next two to three years.

The report was released on April 27 and contains an outlook on housing supply and cost for 2023 to 2025.

The overall national outlook shows that the housing supply will not be able to meet demand. The report says while prices have declined, homeownership will be less affordable because of higher mortgage rates and still-elevated price levels. Until the end of 2022, the Bank of Canada consistently increased interest rates to the present rate of 4.5%. This has made large purchases more expensive and slowed overall consumer spending.

The report also provided some context on the national outlook for rentals. It says rental affordability is also set to decline due to demand outstripping supply, especially in Vancouver and Toronto, which are also home to the highest numbers of newcomers in the country.

When examined in a regional context, the prairies and the Atlantic region appear to offer more stability.

The Prairie provinces

The Prairie provinces of Alberta, Saskatchewan and Manitoba are expected to see more positive housing market developments than other regions in Canada.

The report says this is because of a much smaller decline in housing starts (the number of privately owned homes under construction) in 2023.

It says high interprovincial migration has had a positive impact on the market compared to other regions over the forecast period. The average price of a house in these provinces is less than $470,000 according to the most recent data from the Canadian Real Estate Association.

The report also says that Calgary will see a slowdown in housing price growth in 2023 due to less demand for single-detached homes in favour of townhomes and condominiums. As more people demand these lower-priced homes, the overall market is expected to be pressured to lower prices.

Ontario, British Columbia, and Quebec

Three of Canada’s most populous provinces are likely to see significant drops in housing starts compared to other regions in Canada.

Toronto, Vancouver and Montreal are home to Canada’s largest housing markets and are already reporting a strained supply of homes.

The data on Vancouver suggests that house starts will fall because developers face a shrinking customer base for condominiums, in addition to elevated construction and financing costs. It also anticipates that rental demand will outpace growth in the purpose-built rental supply.

Toronto has a similar outlook and highlights elevated prices over the next two years and a construction backlog as significant factors in the lower supply of housing.

Rental market conditions are also expected to remain under pressure. The average rent on a one-bedroom apartment in Toronto is currently $2,400 according to , a popular apartment listing website.

Atlantic region

The Atlantic region, consisting of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador is viewed as moderate when compared to the other regions in the report.

In Halifax, the region's largest city, home prices have been steadily decreasing since the high of April 2022. However, there is a low inventory of homes for sale, which is driving up prices. The report says the city is still considered affordable to out-of-province buyers from more expensive markets.

The report also says that by the end of 2023, it is expected that a large amount of housing starts will reach completion and ease some of the pressure on the market.