Home prices could fall 7 per cent in 2021, hitting Prairies hard: Moody’s forecast

TORONTO — Moody’s Analytics, Inc. says home prices across Canada could tumble about seven per cent in 2021, as unemployment dampens the hot real estate market.

The financial intelligence company says there is a dangerous oversupply of new, single-family homes in Calgary and Edmonton, on top of affordability issues in Vancouver and Toronto.

Moody’s report did not go into detail on how it created the forecasts, but says that its 2021 home price index also calls for a 6.7 per cent decrease for single-family homes and a 6.5 per cent decline in condo apartments.

“The housing market will no longer be able to escape the poor condition of the labour market as vacancy and delinquency rates rise in 2021,” said economist Abhilasha Singh.

“However, while all regions are expected to experience price declines, the size of the impact will vary meaningfully across regions.”

The prediction from Moody’s comes after the Canadian Real Estate Association reported record-shattering home sales in July and August amid low mortgage rates.

RELATED: CREA reports Canadian home sales climb again, set record for August

But Moody’s forecast says the real estate sector will lose its momentum, especially in the Prairies, amid fading government supports, the end of mortgage payment deferrals and ongoing struggles with consumer debt and joblessness.

If a COVID-19 vaccine comes out in the back half of 2021, the report suggests that home prices will bounce back in 2022.

This report by The Canadian Press was first published Sept. 24, 2020.

The Canadian Press

Top Stories

Top Stories

Most Watched Today